AppLovin Corporation (NASDAQ:APP) was among the stocks Jim Cramer discussed on Mad Money as he addressed investors’ recent overblown worries and growth stocks stuck in bear-market territory. A caller asked if they should sell their position or hang on to it, and Cramer replied:
Okay, AppLovin was really not as much of a SaaS story… and I appreciate that because a lot of these stocks are that have come down. As much as we think that Google’s going to come into their market, if that’s the case, the stock’s selling at 27 times earnings. It can go lower. It’s bouncing right now. Why don’t we let it bounce? I don’t know, it’s at $433. It could probably bounce to $450, $460. But then I think you gotta trim it because I do fear Google myself.
A technical stock market chart. Photo by Energepic from Pexels
AppLovin Corporation (NASDAQ:APP) provides a software platform that helps advertisers and app developers market and monetize their content. The company offers advertising solutions, analytics tools, connected TV services, and mobile games. During the April 1 episode, Cramer mentioned the stock while discussing winners and losers of Q1 and said:
Second-worst performer, wow, much-loved company AppLovin, down almost 41%. This is a former market darling, which helps mobile game developers and other digital businesses to grow their reach and monetize their platforms through advertising. Had the business to itself. It’s honestly, it is a very fine business, by the way, with fantastic growth, impressive profitability. But the stock got really expensive. Entering this year, it was selling for more than 45 times earnings. That left the stock of AppLovin very vulnerable. If your stock has a high multiple and there’s even a whiff of concern that it could be displaced by AI, then investors will sell first and ask questions later.
You can find out more about the other winners and losers of Q1 that Cramer discussed here.
While we acknowledge the potential of APP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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