AI, crypto top tech stocks: AppLovin, MicroStrategy, Palantir, Nvidia

Artificial intelligence is still an abstract concept for many everyday consumers who are not sure how it will change their lives. But there is no question whether companies find value in it.

Some of the biggest winners in this year’s stock market rally that saw the Nasdaq jump 33% and other US indexes gain double digits have direct links to rapid advances in AI. Chipmaker Nvidia he is among them, but he is not alone.

The other standout theme that led this year’s outperformers is crypto. Starting with the launch of funds traded on the bitcoin exchange in January, cryptocurrencies had a great 2024, scored by By Donald Trump electoral victory, that was financed heavily from the crypto industry. A number of crypto-related stocks got a big boost.

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

AppLovin entered the year with a market capitalization of about $13 billion and was best known for investing in a collection of mobile game studios that had produced titles such as “Woody Block Puzzle,” “Clockmaker” and ” Bingo Story”.

At the end of the year, AppLovin’s valuation exceeded $110 billion, making it worth more than Starbucks, Intel and Airbnb. As of Tuesday’s close, AppLovin’s stock is up 758% this year, so far overcoming all other technology companies.

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

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

Net income in the quarter grew by 300%, raising the company’s profit margin to 36.3% from 12.6% over the course of a year.

AppLovin CEO Adam Foroughi, who net worth has blown past $10 billion, he’s even more excited about what’s to come. On the company’s earnings call in November, Foroughi talked about an e-commerce test project that allows companies to offer targeted ads in games.

“In all my years, It’s the best product I’ve ever seen released by us, the fastest growing, but it’s still in pilot,” he said.

Afterwards climb 346% in 2023, it was difficult to imagine MicroStrategy escort by finding another tool. But he did.

The company’s stock price has it jumped 467% this year on the back of a bitcoin buying strategy that made founder Michael Saylor a crypto cult hero.

In mid-2020, the company announced a plan to start buying bitcoin. Up until this point, MicroStrategy had been an average business intelligence software vendor, but since then, it has acquired more than 444,000 bitcoins, using its ever-increasing stock price as a way to sell stock, grow debt and buy more currency.

He is now the fourth largest bitcoin holder in the world, behind the sole creator Satoshi Nakamoto, BlackRock’s iShares Bitcoin Trust and the crypto exchange Binance, with a stockpile valued at close to $44 billion. MicroStrategy’s market capitalization has grown from about $1.1 billion when it was just a software company to $80 billion today.

While the rally was long underway before November, Trump’s election victory last month added fuel. The stock is up 57% since then while bitcoin has gained about 44%. Trump has called bitcoin a “scam,” but it was the industry’s favorite choice in this election and has been heavily supported by some of the major players, including Coinbase.

“With the red sweep, Bitcoin is growing with the tailwinds, and the rest of the digital assets are starting to grow as well,” Saylor told CNBC shortly after the election. He said that bitcoin remains the “safe haven” in the crypto space, but as a “digital asset framework” is put in place for the broader crypto market, “there will be growth across the digital asset industry”.

Palantir he had a lot of great runs in 2024 on his way to a 380% gain in his share price. One of its best deals came last month, when the software company raised its revenue outlook a day before the presidential election.

The company, which sells data analysis tools to defense agencies, knocked out its target for 2024, with fourth-quarter guidance that blew away analysts’ estimates. Palantir also topped the results for the third quarter, leading CEO Alex Karp to declare in the release of earnings“We absolutely gutted this quarter, driven by relentless AI demand that won’t slow down.”

The stock jumped 23% on the earnings report and then another 8.6% the next day after Trump’s victory. Co-founder and board member of Palantir Peter Thiel was a big push of Trump in the 2016 campaign and helped organize a meeting with technology leaders at Trump Tower shortly after that election. Karp was one of the participants.

Karp, however, has openly supported the vice president Kamala Harristhe democratic candidate, in the 2024 campaign. He he told the New York Times in a story published in August that Thiel’s early support of Trump and the backlash that followed made it “actually harder to get things done.”

Still, Wall Street rallied behind Palantir after the election on optimism that more military spending would flow to the company.

Karp’s comments in the earnings report before the election suggested the company would be fine anyway.

“Our business growth will accelerate, and our financial performance will exceed expectations as we meet unwavering demand for the most advanced artificial intelligence technologies from our U.S. government and commercial customers,” Karp said. in one letter to shareholders.

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

robinhood shares more than tripled in value this year, despite a 17% drop on October 31, after disappointing earnings.

Investors looked past those numbers a few days later, driving the stock up 20% after Trump’s election victory, as all things related to crypto rallied. One of Robinhood’s biggest growth drivers is crypto, which retail investors can easily buy on the app, alongside their stocks.

Revenue from crypto transactions jumped 165% in the third quarter from a year earlier to $61 million, accounting for 10% of total net revenue.

In addition to bitcoin, Robinhood users can easily buy around 20 other cryptocurrencies, ranging from popular digital assets like ethereum to alt-coins like dogecoin, Shiba Inu and Bonk. At the company’s investor day in November, Robinhood CEO Vlad Tenev said that crypto is more than an investment, but also a “disruptive technology that will change the underlying infrastructure under payments, the loans and a wide variety of commercial assets”.

For the fourth quarter, analysts expected Robinhood to report revenue growth of more than 70% to $805.7 million, according to LSEG, which would be the fastest growth for any quarter since 2021 , the year of the company. went public.

Robinhood’s rally this year has surpassed that of Coinbase, which jumped 61%. But with a market cap of $70 billion, Coinbase is still twice as valuable.

Nvidia an amazing run continued.

Afterwards last year A 239% gain, fueled by excitement around generative AI, Nvidia is up another 183% this year, adding a whopping $2.2 trillion in market cap.

Twice this year Nvidia took the title of the most valuable company in the world. Apple jumped ahead and is approaching $4 trillion, with Nvidia at $3.4 trillion and Microsoft to $3.3 trillion.

Nvidia remains the biggest beneficiary of the AI ​​boom, as the biggest cloud vendors and internet companies snap up all the graphics processing units they can find. Annual revenue has increased by at least 94% in each of the past six quarters, with growth exceeding 200% three times in that stretch.

CEO Jensen Huang said in the company latest earnings report that the next-generation AI chip called Blackwell is in “full production.” Chief financial officer Colette Kress said the company is on track for “several billion dollars” of Blackwell’s revenue in its fourth quarter.

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

While growth is expected to be robust for a company the size of Nvidia, the inevitable slowdown is coming. Analysts project a year-on-year deceleration over the next few quarters with growth in the mid-40s by the second half of next year.

Nvidia relies on an overwhelming amount of revenue from a handful of tech giants, so any economic swing presents significant risk to investors.

This helps explain why Nvidia likes to tell Wall Street about the long list of companies that are building new AI services and “are racing to accelerate the development of these applications with the potential of billions of agents to be deployed in the years to come,” said Kress. on the earnings call.

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