Last year, AppLovin and Palantir Technologies made the list of the 100 best stocks of 2024. And in each of the last three months, both artificial intelligence stocks have made Investor's Business Daily report on new buys by the best mutual funds.
Now, as Palantir continues to trade around its all-time high, AppLovin stock looks to launch a new breakout as it rebounds from a pullback off the record high it hit in February. AppLovin has also landed a spot on the IBD Breakout Stocks Index.
AppLovin And Palantir Ride AI Demand
Based in Palo Alto, Calif., AppLovin provides end-to-end software and AI solutions to help businesses reach, monetize and grow their audiences.
In this month's report on new buys by top funds, leading money managers scooped up $1.44 billion worth of AppLovin stock. Showing Wall Street's continued demand for AI stocks, these institutional investors also bet big on Nvidia at $24.19 billion, Meta Platforms at $13.31 billion, and Palantir at $2.45 billion.
Impressive growth drove AppLovin's huge run last year. Although slowing somewhat from its meteoric numbers in 2024, strong sales and earnings increases carried over into this year.
In the first quarter, the AI-fueled company posted a 40% rise in revenue to over $1.48 billion. Earnings rose 149% to $1.67 per share. When AppLovin reports second-quarter numbers on Aug. 6, analysts forecast 18% sales growth to around $1.27 billion and an earnings increase of 118% to $1.94 per share.
For the full year, Wall Street sees 84% earnings growth to $8.32 per share, followed by a 44% gain to $11.94 per share in 2026.
See Who Joins AppLovin On The IBD Breakout Stocks Index
AppLovin Stock Resets For New Rebound
After notching yet another all-time high in February, AppLovin stock pulled back to regroup. Shares sank below the 10-week moving average, where they remained for two months.
During that retreat, AppLovin reset its base count by undercutting the low in its prior pattern. Such a refresh can set the stage for a sustained new climb.
Note that throughout that downturn, the 50-day moving average stayed above the longer-term 200-day line — a sign of technical resilience.
AppLovin continues to work on a first-stage consolidation with a 428.99 buy point. After trading right along its 50-day line as the base forms, the stock slipped below that benchmark on Tuesday. But up over 3% Wednesday, the stock stands poised to retake its 50-day line.
In another sign of resilience, AppLovin held support at its 21-day exponential moving average. As the AI stock looks to complete its new base and break out, investors should also look for the 21-day line to cross back above the 50-day moving average.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this fund allows you to invest in the entire index in addition to, or rather than, buying individual stocks. Learn more here about the ETF and Innovator.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
