AI, Crypto Stocks: AppLovin, MicroStrategy, Palantir, Nvidia

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

Some of the biggest winners in this year’s stock market rally, which has seen the Nasdaq soar 33% and other U.S. indexes post double-digit gains, have been directly linked to rapid advances in artificial intelligence. Chip manufacturer Nvidia he is among them, but he is not alone.

Another prominent theme that has driven this year’s outperformance is crypto. Starting from launch spot bitcoin exchange traded funds in January, cryptocurrencies had a big 2024, highlighted Donald Trump electoral victory, which was financed strongly by the crypto industry. A number of crypto-related stocks got a big boost.

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

AppLovin entered the year with a market cap of about $13 billion and was best known for investing in a collection of mobile game studios that produced titles like “Woody Block Puzzle,” “Clockmaker” and “Bingo Story.”

Coming out of the year, AppLovin’s valuation jumped over $110 billion, making it worth more than Starbucks, Intel and Airbnb. At Tuesday’s close, shares of AppLovin are up 758% this year, by far surpassing all other technology companies.

While AppLovin went public in 2021, riding the wave of excitement in online gaming from the Covid era, the business is now focused on online ads and growing profits from advances in artificial intelligence.

Last year, AppLovin released an updated version 2.0 of its ad search engine, called AXON, which helps place more targeted ads on game apps the company owns and is also used by studios that license the technology. Third-quarter software platform revenue rose 66% to $835 million, outpacing overall growth of 39%.

Net income in the quarter rose 300%, lifting the company’s profit margin to 36.3% from 12.6% year-over-year.

AppLovina CEO Adam Foroughi, whose net worth has passed $10 billion, he’s even more excited about what’s to come. On the company’s earnings call in November, Foroughi raved about an e-commerce test project that allows companies to offer targeted in-game ads.

“In all my years, it’s the best product I’ve ever seen us put out, it’s the fastest growing, but it’s still in the pilot phase,” he said.

After climbing 346% 2023 was hard to imagine MicroStrategy shares finding another gear. But it is.

The company’s share price has jumped 467% this year on the back of a bitcoin buying strategy that made founder Michael Saylor a crypto cult hero.

In mid-2020, the company announced a plan to start buying bitcoins. Up until that point, MicroStrategy was a middling business intelligence software vendor, but it has since bought more than 444,000 bitcoins, using its ever-rising share price as a way to sell stock, raise debt and buy more coins.

He is now the fourth largest holder of bitcoins in the world, behind only creator Satoshi Nakamoto. BlackRock’s iShares Bitcoin Trust and crypto exchange Binance, with a stock valued at close to $44 billion. MicroStrategy’s market capitalization has grown from about $1.1 billion when it was just a software company to $80 billion today.

While the rally was underway long before November, Trump’s election victory last month added fuel. The stock is up 57% since then, while bitcoin has gained about 44%. Trump once called bitcoin a “fraud,” but he was the industry’s preferred choice in this election and received strong support from some of the leading players, including Coinbase.

“With the red swing, Bitcoin is going up with a tailwind, and the rest of the digital assets are going to start going up as well,” Saylor told CNBC shortly after the election. He said bitcoin remains a “safe trade” in the crypto space, but as a “digital asset framework” is established for the broader crypto market, “there will be an uptick in the entire digital asset industry.”

Palantir had many big runs in 2024 en route to a 380% increase in share price. One of the best stocks came last month, when the software company raised its earnings outlook a day before the presidential election.

A company that sells data analysis tools to defense agencies, bumped into its 2024 target, with fourth-quarter guidance that beat analysts’ estimates. Palantir also beat third-quarter results, prompting CEO Alex Karp to say in earnings announcement“We absolutely gutted this quarter, driven by relentless AI demand that won’t slow down.”

The stock jumped 23% after the earnings report and then another 8.6% the day after Trump’s victory. Co-founder and board member of Palantir Peter Thiel was a big push for Trump in the 2016 campaign and helped organize it meeting with technical managers in Trump Tower shortly after that election. Karp was one of the participants.

Karp, however, openly supported the vice president Kamala Harriscandidate of the Democratic Party, in the 2024 campaign. He he told The New York Times in a story published in August that Thiel’s earlier support for Trump and the backlash that followed made it “actually harder to get things done.”

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

Karp’s comments in the earnings report ahead of the election suggest the company would be fine either way.

“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 US government and commercial customers,” Karp said in letter to shareholders.

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

Robinhood shares have more than tripled in value this year, despite falling 17% on October 31, after disappointing earnings.

Investors looked beyond those numbers a few days later, sending shares up 20% after Trump’s election victory, while all things crypto-related rebounded. One of the biggest drivers of Robinhood’s growth is cryptocurrency, which small investors can easily buy in the app, along with their shares.

Revenue from crypto transactions jumped 165% in the third quarter year-over-year to $61 million, accounting for 10% of total net revenue.

In addition to bitcoin, Robinhood users can easily buy about 20 other cryptocurrencies, ranging 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 crypto is more than just an investment, but a “disruptive technology that will change the fundamental infrastructure underlying payments, lending and a wide range 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, when the company went public.

Robinhood’s rise this year has outstripped that of Coinbase, which jumped 61%. But with a market cap of $70 billion, Coinbase is still worth twice as much.

Nvidia’s the astonishing streak continued.

Tracking last year’s Gaining 239%, fueled by excitement around generative artificial intelligence, Nvidia is up an additional 183% this year, adding a whopping $2.2 trillion in market capitalization.

Twice this year Nvidia grabbed the title the world’s most valuable public companies. Apple jumped ahead and approached $4 trillion, with Nvidia at $3.4 trillion and Microsoft to 3.3 trillion dollars.

Nvidia remains the biggest beneficiary of the AI ​​boom, as the biggest cloud vendors and Internet companies grab whatever graphics processing units they can find. Annual revenue has grown at least 94% in each of the past six quarters, with growth exceeding 200% three times in that period.

CEO Jensen Huang said in the company latest earnings report that the next-generation AI chip dubbed Blackwell is in “full production.” Chief Financial Officer Colette Kress said the company is on track for “several billion dollars” in Blackwell revenue in its fourth quarter.

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

While growth is expected to remain strong for a company of Nvidia’s size, an inevitable slowdown is coming. Analysts forecast a year-over-year slowdown over the next few quarters with growth easing 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 changes represent a significant risk for investors.

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

WATCH: Next year is the ‘stock market for stock markets’