In 2023, AppLovin's revenue grew by 17%, and it turned profitable again as the digital advertising market stabilized. CEO Adam Foroughi reiterated his outlook for achieving "20% to 30% year-over-year growth for the foreseeable future." This reflects how the market has begun to regain confidence in the company's capacity for sustained growth, particularly supported by their AI-powered services.
Analysts expect AppLovin's revenue to clock at a compound annual growth rate (CAGR) of 24% from 2023 to 2026, with its EPS rising at a remarkable CAGR of 91%. This indicates strong future prospects for AppLovin, showcasing its potential as a major player in the tech industry amidst a recovering economic backdrop.
The digital advertising market faced challenges from high inflation and rising interest rates, previously affecting AppLovin's growth. However, the stabilization in 2023 has allowed it to harness opportunities for revenue generation through its innovative AI-powered tools, leading to improved profitability and a positive outlook for investors.
Investors should consider smaller tech companies like AppLovin, Opera, and Datadog that have strong growth potential but haven't yet become household names in the retail investing community. These companies could represent the next wave of significant investment returns for those looking beyond the traditional giants.
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