Applovin (APP) Emerges As Nasdaq 100's Dark Horse In A Market Fixated On Nvidia, Tesla, Palantir

In a market obsessed with the usual suspects—Nvidia Corp, Tesla Inc and Palantir Technologies Inc — one stock has been quietly stealing the show: AppLovin Corp. APP.

While Wall Street fawns over AI chips and self-driving tech, APP has been quietly outperforming nearly every major stock in the Nasdaq 100—and it’s not even close.

Let’s Talk Numbers

Over the past year, APP stock has soared 698%, making it the top-performing stock in the Nasdaq 100. Even in the last six months, it’s up a staggering 466%, comfortably beating Palantir’s 323% and MicroStrategy Inc’s 161%. Big-name AI darlings like Nvidia and Tesla? They aren’t even in the same league.

So, what’s fueling this relentless rally?

AI-powered mobile advertising.

Headquartered in Palo Alto, AppLovin has found its sweet spot in the mobile app ecosystem, helping businesses reach and monetize audiences through its AI-driven marketing software. And with digital ad spending continuing to climb, AppLovin is cashing in big.

Read Also: Jim Cramer Says This Tech Stock Is Speculative But He Likes It

Technicals Are Screaming ‘Bullish’

APP stock isn’t just riding hype—it’s riding strong technical momentum.

Chart created using Benzinga Pro

APP stock is currently trading at $380.63, well above key moving averages:

Eight-day SMA: $369.60
20-day SMA: $350.97
50-day SMA: $344.82
200-day SMA: $171.10

Add in a MACD (moving average convergence/divergence) of 12.08 and an RSI (relative strength index) of 61.64, and APP stock is flashing bullish signals across the board.

Translation? Buyers are in control, and momentum remains strong.

The Big Test: Q4 Earnings

The next major catalyst? Fourth quarter earnings on Feb. 12. Wall Street is eyeing $1.24 EPS on $1.26 billion in revenue according to Benzinga Pro data. Given AppLovin’s track record, a blowout quarter could send shares even higher.

The market reception of the recent earnings reports from Alphabet (GOOGL) and Tesla (TSLA) left much to be desired among investors. This reaction, particularly towards Alphabet's results, may serve as an ominous foreshadowing of what is to come this week as four other members of 'The Magnificent 7' gear up to report.

Alphabet vs. Tesla Performance

Despite Tesla missing consensus estimates and facing margin pressures, Alphabet managed to beat estimates with several positive outcomes, notably in search and cloud areas. However, the spotlight shifted to Alphabet's larger-than-anticipated capital expenditures, raising concerns about ongoing AI-focused capex and its eventual returns. The worries were accentuated by Alphabet's management highlighting the risk of underinvestment. In contrast, Tesla experienced a drop in Q2 earnings, while Alphabet marked a 28.6% increase year-over-year with a 15% rise in revenues.

Future Outlook for Mag 7

The impending reports from Meta Platforms, Microsoft, Amazon, and Apple are expected to reflect on capital expenditures, growth trends in cloud services, and market skepticism towards AI initiatives. Amazon faces scrutiny over decelerating cloud growth compared to its peers, while Apple's focus remains on evolving iPhone trends in the Chinese market.

Group Performance and Expectations

The 'Mag 7' stocks are projected to showcase a 26.8% surge in earnings and a 13.7% increase in revenues compared to the same period last year. This sector is a crucial driver of the broader Technology industry, which anticipates a 16.8% earnings uptick and 9.5% revenue growth for Q2.

Industry Sector Growth Analysis

The Technology sector, buoyed by an upswing in estimates for the Mag 7 stocks, has witnessed a positive trend in recent quarters. The upcoming earnings season, with a multitude of companies preparing to report results, including key players like McDonald’s, Proctor & Gamble, and Pfizer, is expected to provide further insights into sector performance.

Earnings Landscape Overview

With over 41% of S&P 500 members already having disclosed Q2 results, the overall earnings show a modest 0.6% increase year-over-year alongside a 4.9% rise in revenues. As the reporting cycle gains momentum, eyes are on the broader market to gauge earnings and revenue beats.

Insights Into Q2 Revenue Trends

Notably, the Q2 revenue beats percentage hit a historic low of 57.5% for the 207 index members, indicating a demanding quarter compared to the last two decades.

Earnings Big Picture Analysis

When considering the aggregate picture for Q2, S&P 500 earnings are predicted to grow by 6.9% year-over-year with a 5.2% increase in revenues. The promising revisions trend observed prior to the earnings season underscores a positive outlook for the quarter's financial performance.

Analysis of Index Level Aggregate Earnings GrowthThe Landscape of Aggregate Earnings Growth

At this pace, AppLovin is rewriting the script on Nasdaq 100 winners—and proving that sometimes, the best bets aren’t the most obvious ones.

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This illustration was generated using artificial intelligence via Midjourney.

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