High-tech AI and cryptocurrency stocks: AppLovin, MicroStrategy, Palantir, Nvidia

Artificial intelligence remains an abstract concept for many everyday consumers who are unsure how it will change their lives. But there is no question whether companies are finding value in it.

Some of the biggest winners from this year’s stock market rally, in which the Nasdaq jumped 33% and other U.S. indexes posted double-digit gains, have direct ties to rapid advances in AI. chip maker NVIDIA He is among them, but he is not alone.

The other notable topic that has driven this year’s best is cryptocurrency. Starting with the launch of spot bitcoin exchange-traded funds in January, cryptocurrencies had a big 2024, marked by donald trump electoral victory, which was founded largely by the crypto industry. Several cryptocurrency-linked stocks received a big boost.

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

AppLovin It entered the year with a market capitalization of around $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.”

By the end of the year, AppLovin’s valuation had skyrocketed to more than $110 billion, making it worth more than starbucks, Intel and Airbnb. As of Tuesday’s close, AppLovin shares are up 758% this year, so far incomparable all other technology companies.

While AppLovin became public In 2021, riding a wave of Covid-era enthusiasm for online gaming, the business is now focused on online advertising and growing profits from advances in artificial intelligence.

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

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

AppLovin CEO Adam Foroughi, whose net worth has surpassed $10 billion, he is even more excited about what is to come. On the company’s earnings conference call in November, Foroughi praised 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 seen launched by us, the fastest growing, but it’s still in the pilot phase,” he said.

After up 346% in 2023, it was difficult to imagine MicroStrategy stock finding another gear. But that’s how it was.

The company’s share price has jumped 467% this year following a bitcoin buying strategy that turned founder Michael Saylor into a cryptocurrency cult hero.

In mid-2020, the company announced a plan to start buying bitcoins. Until that point, MicroStrategy had been a mediocre business intelligence software provider, but it has since purchased more than 444,000 bitcoins, using its ever-rising stock price as a way to sell shares, raise debt, and buy more coins.

He is now the fourth largest bitcoin holder in the world, behind only creator Satoshi Nakamoto. BlackRock iShares Bitcoin Trust and the cryptocurrency exchange Binance, with a reserve valued at nearly $44 billion. MicroStrategy’s market capitalization has increased from around $1.1 billion when it was just a software company to $80 billion today.

While the rally was already underway before November, Trump’s election victory last month added fuel. The stock has risen 57% since then, while bitcoin has gained about 44%. Trump once called bitcoin a “scam,” but it was the industry’s preferred choice in this election and had strong backing from some major players, including Coinbase.

“With the red sweep, 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 established for the broader crypto market, “there will be a surge across the entire digital asset industry.”

Palantir had many big runs in 2024 on its way to a 380% gain in its share price. One of its brightest moments 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, struck its target for 2024, with guidance for the fourth quarter that confounded analysts’ estimates. Palantir also beat third-quarter results, prompting CEO Alex Karp to testify at the earnings release“We completely gutted this quarter, driven by relentless demand for AI that won’t let up.”

The stock rose 23% on the earnings report and then another 8.6% the day after Trump’s victory. Palantir co-founder and board member Peter Thiel was a big boost for Trump in the 2016 campaign and helped organize a meeting with technology executives at Trump Tower shortly after that election. Karp was one of the attendees.

Karp, however, openly supported the vice president Kamala Harristhe Democratic candidate, in the 2024 campaign. He told the New York Times in an article published in August that Thiel’s previous support for Trump and the backlash that followed made it “actually harder to get things done.”

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

Karp’s comments in the pre-election earnings report suggest the company would be fine in any case.

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

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

Robinhood The stock has tripled in value this year, despite a 17% drop on October 31, after disappointing earnings.

Investors overlooked those numbers a few days later, sending stocks up 20% after Trump’s election victory, while everything related to cryptocurrencies rallied. One of Robinhood’s biggest growth drivers is cryptocurrencies, which retail investors can easily purchase on the app, along with their stocks.

Crypto transaction revenue increased 165% in the third quarter year-over-year to $61 million, representing 10% of total net revenue.

In addition to bitcoin, Robinhood users can easily purchase 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 cryptocurrencies are more than just an investment, but also a “disruptive technology that will change the underlying infrastructure behind payments, lending, and broad variety of tradable assets.

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

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

Nvidia The amazing streak has continued.

Following last year With a 239% gain, fueled by enthusiasm around generative AI, Nvidia soared another 183% this year, adding a whopping $2.2 trillion in market capitalization.

Twice this year Nvidia grabbed the title of the most valuable publicly traded company in the world. Apple has moved forward again and is approaching $4 trillion, with Nvidia at $3.4 trillion and microsoft to 3.3 billion dollars.

Nvidia remains the biggest beneficiary of the AI ​​boom, as the biggest cloud providers 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 last six quarters, with growth exceeding 200% three times in that span.

CEO Jensen Huang said in the company’s report 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 to make “several billion dollars” of revenue from Blackwell in its fourth quarter.

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

While growth is expected to remain strong for a company the size of Nvidia, the inevitable slowdown looms. Analysts project a year-over-year slowdown over the next few quarters and growth falling to the mid-40s by the second half of next year.

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

That helps explain why Nvidia likes to tell Wall Street about the long list of companies that are creating new AI services and “are racing to accelerate the development of these applications with the potential to deploy billions of agents across the world.” coming years,” Kress said. on the earnings call.

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