AI application stocks have experienced a significant surge, with market interest in software companies like AppLovin (APP, Financial) and Palantir (PLTR) skyrocketing. As of November 15, AppLovin's stock rose by 616.8% this year, substantially outpacing NVIDIA's gains during the same period, while Palantir's stock increased by over 283%. These gains reflect investor optimism about the commercial potential of AI technology.
AppLovin reported remarkable financial growth in its latest earnings report, with third-quarter revenue reaching $1.2 billion, a 39% increase from the previous year, and net income soaring by 300% to $434 million. The company's success is attributed to its AI-driven advertising engine, which enhances ad targeting and boosts business growth. The strong earnings led to a 46% surge in AppLovin's stock price following its report.
AI technologies are increasingly being integrated across various sectors. AppLovin's programmatic ad trading platform reaches over 1.5 billion global users, connecting advertisers with mobile applications, offering extensive ad coverage, and boosting app revenue through higher exposure.
Palantir, another notable AI-driven company, reported a 30% increase in third-quarter revenue to $726 million, surpassing market expectations. This growth was largely fueled by rising AI demand and a 50% year-over-year increase in U.S. commercial business revenue. Palantir also adjusted its full-year growth guidance upwards, further fueling investor confidence.
Beyond AppLovin and Palantir, other software companies such as Tempus, Shopify, Duolingo, and Twilio have also seen stock price increases exceeding 30% since the third quarter, driven by the ongoing AI wave.
In the broader AI industry, applications are showing significant growth. Popular AI tools and platforms, such as ChatGPT and Microsoft's Copilot, are seeing sharp increases in user activity and visits, highlighting the rapid growth in AI adoption across various domains.
Looking ahead, investment in the tech industry is expected to focus on AI advancements. Analysts suggest keeping an eye on opportunities in AI computing power, applications, data, and AI terminals. Companies leveraging AI for efficiency and new monetization models, especially in media, are poised for valuation and performance boosts.
Despite the optimism, there remains a need for caution regarding the pace of AI commercialization. According to a recent survey, only 3% of IT budgets are projected to be allocated to generative AI technologies in 2024, indicating that further development and patient investment may be necessary.
