AI, Crypto Top Tech Stocks: AppLovin, MicroStrategy, Palantir, Nvidia

Artificial intelligence is still an abstract concept for many everyday consumers and uncertain about how it will change their lives. But there is no doubt that companies find value in it.

Some of the biggest winners from this year’s stock market rally, which saw the Nasdaq gain 33% and other US indices post double-digit gains, are directly linked to rapid advances in AI. chip manufacturer Nvidia is among them, but it is not alone.

The other prominent theme driving this year’s outperformers is crypto. Starting with that start Spot Bitcoin exchange-traded funds in January saw cryptocurrencies have a big 2024, punctuated by Donald Trump’s Election victory that was financed heavily from the crypto industry. A number of stocks linked to cryptocurrencies experienced a major boost.

With four trading days left in the year, here are the five best-performing U.S. tech stocks of 2024 among companies valued at $5 billion or more.

AppLovin started the year with a market capitalization of around $13 billion and was best known for its investments in a number of mobile gaming studios that had produced titles such as Woody Block Puzzle, Clockmaker and Bingo Story.

As of year-end, AppLovin’s valuation has risen to over $110 billion, making the company more than worth it Starbucks, Intel And Airbnb. As of Tuesday’s close, AppLovin shares were up 758% so far this year surpass all other technology companies.

While AppLovin went public In 2021, riding a wave of Covid-era online gaming enthusiasm, the business is now focused on online advertising and booming profits from advances in AI.

Last year, AppLovin released updated version 2.0 of its ad search engine called AXON, which helps serve more targeted ads on the company’s gaming apps and is also used by studios that license the technology. Software platform revenue rose 66% to $835 million in the third quarter, outpacing overall growth of 39%.

Net income rose 300% in the quarter, increasing the company’s profit margin to 36.3% from 12.6% over a year.

AppLovin CEO Adam Foroughi, whose Net worth has grown to over $10 billion and is even more excited about what’s to come. At the company’s earnings call in November, Foroughi raved about a test e-commerce project that allows companies to offer targeted advertising in games.

“In all my years, it is the best product I have ever seen us bring to market, with the fastest growth, but it is still in the pilot phase,” he said.

After Slope 346% In 2023 this was hardly imaginable MicroStrategys Stock finds another gear. But it happened.

The company’s share price has rose 467% this year based on a Bitcoin buying strategy that has made founder Michael Saylor a crypto cult hero.

In mid-2020, the company announced a plan to begin purchasing Bitcoin. Up until that point, MicroStrategy was a mediocre provider of business intelligence software, but since then the company has purchased over 444,000 Bitcoins and used its ever-rising stock price to sell stocks, take on debt, and buy more coins.

It is now the fourth largest Bitcoin holder in the world, behind only creator Satoshi Nakamoto. BlackRock’s iShares Bitcoin Trust and crypto exchange Binance, with a stock worth nearly $44 billion. MicroStrategy’s market capitalization has grown from around $1.1 billion when it was a pure software company to $80 billion today.

While the rally was underway well before November, Trump’s victory last month provided additional impetus. The stock is up 57% since then, while Bitcoin has gained about 44%. Trump once called Bitcoin a “fraud,” but it was the industry’s preferred choice this election and was criticized by some of the leading players, including Coinbase.

“With the red momentum, Bitcoin is rising with tailwinds, and the rest of the digital assets will start to rise as well,” Saylor told CNBC shortly after the election. He said Bitcoin remains the “safe trade” in the crypto space, but as a “digital asset framework” is created for the broader crypto market, “there will be an uptick in the entire digital asset industry.”

Palantir had many big successes in 2024 on the way to a 380% increase in share price. The software company achieved one of its best wins last month when it raised its revenue outlook a day before the presidential election.

The company that sells data analysis tools to defense agencies, appeared its 2024 target, with its fourth-quarter forecast beating analysts’ estimates. Palantir also beat third-quarter results, prompting CEO Alex Karp to issue a statement Results publication“We absolutely crushed this quarter, driven by unrelenting AI demand that shows no signs of slowing down.”

The stock rose 23% in the earnings report and another 8.6% the next day after Trump’s victory. Co-Founder and Board Member of Palantir Peter Thiel was a big Trump booster in the 2016 election campaign and helped organize it Meeting with technical managers at Trump Tower shortly after that election. Karp was one of the participants.

However, Karp openly supported the vice president Kamala Harristhe Democratic candidate, in the 2024 election campaign. He told the New York Times A story published in August said Thiel’s past support of Trump and the backlash that followed “actually made it harder to get things done.”

Still, Wall Street has backed Palantir following the election, optimistic that the company will receive more military spending.

Karp’s comments in the earnings report before the election suggest the company would do well no matter what.

“Our business growth is accelerating and our financial performance is exceeding expectations as we meet continued demand from our U.S. government and commercial customers for the most advanced artificial intelligence technologies,” Karp said in a Letter to shareholders.

Analysts expect revenue to grow about 24% to $3.5 billion in 2025, according to LSEG.

Robinhood The shares have more than tripled in value this year, despite a 17% decline as of Oct. 31 disappointing result.

A few days later, investors left those numbers behind, sending the stock up 20% following Trump’s election victory as everything related to cryptocurrencies rose. One of Robinhood’s biggest growth engines is crypto, which retail investors can easily buy through the app alongside their stocks.

Crypto transaction revenue increased 165% year over year to $61 million in the third quarter and accounted for 10% of total net revenue.

In addition to Bitcoin, Robinhood users can easily purchase about 20 other cryptocurrencies, from popular digital assets like Ethereum to altcoins like Dogecoin, Shiba Inu, and Bonk. At the company’s investor day in November, Robinhood CEO Vlad Tenev said that crypto is more than just an investment but also a “disruptive technology that will transform the underlying infrastructure for payments, lending and a variety of tradable assets.”

For the fourth quarter, analysts expect Robinhood’s revenue to grow by over 70% to $805.7 million, according to LSEG. This would be the fastest quarterly growth rate since 2021, the year the company was founded went public.

Robinhood’s rally this year exceeded that of Coinbase, which gained 61%. But with a market capitalization of $70 billion, Coinbase is still twice as valuable.

Nvidia’s The amazing run continued.

Below last year With a 239% increase fueled by enthusiasm for generative AI, Nvidia rose another 183% this year, adding a whopping $2.2 trillion to its market cap.

Nvidia twice this year grabbed the title the most valuable listed company in the world. Apple has jumped back forward and is approaching $4 trillion, while Nvidia is at $3.4 trillion Microsoft at $3.3 trillion.

Nvidia remains the biggest beneficiary of the AI ​​boom, as the biggest cloud providers and internet companies snap up all the graphics processors they can find. Annual revenue has increased at least 94% in each of the last six quarters, with growth exceeding 200% three times during that period.

said CEO Jensen Huang in the company presentation Current earnings report that the next-generation AI chip called Blackwell is in “full production.” Chief Financial Officer Colette Kress said the company was on track to generate “multibillions of dollars” in Blackwell revenue in the fourth quarter.

“Every customer is fighting to be first to market,” Kress said. “Blackwell is now in the hands of all of our major partners and they are working to bring their data centers into shape.”

While growth is expected to remain robust for a company of Nvidia’s size, the inevitable slowdown is coming. Analysts are forecasting a year-on-year slowdown in the next few quarters, with growth falling to the mid-40s by the second half of next year.

Nvidia expects outsized revenue from a handful of tech giants, so economic fluctuations pose significant risk for investors.

That explains why Nvidia likes to tell Wall Street about the extensive list of companies developing new AI services and “accelerating the development of these applications, with the potential to deploy billions of agents in the coming years,” Kress said on the earnings call .

REGARD: Next year is a “stock picker market”