Jim Cramer on AppLovin: “Not So Magical Now”

AppLovin Corporation (NASDAQ:APP) is one of the stocks in focus on Jim Cramer’s game plan. Cramer highlighted the market’s change in sentiment toward the stock, as he commented:

You know what the market doesn’t like? How about AppLovin, which is a former market darling from the year of magical investing? Not so magical now that Google’s decided to crowd into that space.

A stock market graph. Photo by energepic.com

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. Cramer highlighted Wall Street’s feelings toward the stock in light of AI during the February 2 episode, as he stated:

Before the break, I went over January’s 10 best-performing stocks in the S&P 500… But what were the worst performers in the S&P 500 in the first month of the year? Okay, most of these are enterprise software companies where investors are worried about AI displacement. These… used to be the hottest stocks in the world. Now, the worst performer, AppLovin was down nearly 30%. The former market darling got its start helping mobile game developers expand their reach, sell advertisements, though lately, it’s expanded into other areas like e-commerce advertising. Still, the core business is about ads for mobile games.

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.