We recently published a list of 13 High Growth Large Cap Stocks To Invest In. In this article, we are going to take a look at where AppLovin Corporation (NASDAQ:APP) stands against other best high growth stocks to invest in.

After two years of 25%+ gains, some investors worry that stocks are overvalued. Historically, the third year of a bull market is not usually spectacular, but it is not typically negative either. A lot depends on factors like interest rates and global tensions. According to Morgan Stanley, investor sentiment has maintained a familiar pattern over the years, with pessimism in late 2022, skepticism throughout 2023 even as stocks soared, and now, growing optimism for 2025. The real turning point could be AI. If businesses embrace artificial intelligence the way they did the internet in the late ’90s, it could result in a productivity boom that keeps the market rally going. As for stocks, big tech still reigns supreme, but valuations are much lower than during the dotcom bubble, making them less risky. Still, Morgan Stanley believes a smart strategy for 2025 might be balancing tech investments with financials and industrials to stay diversified.

In 2024, large-cap growth stocks in the United States had another strong year, with the Russell Growth Index climbing 33.4%, mostly powered by a concentrated group of major tech and communication companies, commonly known as the Magnificent Seven. By December, these handful of stocks were responsible for a huge chunk of the gains. Growth stocks kept their winning streak in the fourth quarter, outpacing value stocks by 9.2%, according to a report by LSEG. Over the past decade, they have consistently beat the Russell Value index, averaging 7% higher annual returns.

Investors are on edge as trade policies shake up the market, wiping out $4 trillion from recent highs. Fears of an economic slowdown have triggered a major sell-off, with the broader market dropping 2.7%, its worst day of the year, while the Nasdaq plunged 4% on March 10. Since peaking in February, the wider market has fallen 8.6% as of March 10, inching toward correction territory. Tech stocks, which drove market gains in 2023 and 2024, are also struggling in 2025, pulling major indexes down. Hedge funds are also backing away, cutting stock exposure at the fastest rate in over two years. Optimism around pro-growth policies has receded as uncertainty blooms in the market. Even with recent losses, stock valuations remain near record highs, leaving investors bracing for more volatility ahead.

A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform.

Our Methodology

For this article, we used the Finviz screener to identify large-cap stocks with market capitalizations ranging from approximately $10 billion to $200 billion as of March 14. We then applied a filter to select stocks with a 5-year revenue growth exceeding 20%, verifying this data through additional sources. Using Insider Monkey’s Q4 2024 hedge fund database, we examined the hedge fund sentiment for each stock and selected 13 most popular ones. The stocks are ranked in ascending order based on the average 5-year revenue growth.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

AppLovin Corporation (NASDAQ:APP)

Number of Hedge Fund Holders: 95

Average 5-Year Revenue Growth: 31.29%

AppLovin Corporation (NASDAQ:APP) is a tech company that helps businesses market and monetize their apps. AppLovin’s platforms include AppDiscovery for ad placement, MAX for bidding, Adjust for analytics, and Wurl for streaming ad management. It also provides SparkLabs for app store optimization, AppLovin Exchange for ad buying, and Array for mobile app management.

In Q4 2024, AppLovin Corporation (NASDAQ:APP)’s revenue jumped 44% year-over-year to $1.37 billion and adjusted EBITDA soared 78% to $848 million, reaching a 62% margin. Free cash flow more than doubled to $695 million, up 105% from last year and 28% from last quarter. The advertising business was a major driver for AppLovin, especially in mobile gaming and eCommerce ads, bringing in $999 million in revenue. A temporary spike in data center costs slightly impacted margins, but things should level out moving forward. Recently, the company announced that it is selling its Apps business for $900 million: $500 million in cash and the rest as a minority equity stake in a private company. The deal is expected to close in Q1 2025, pending regulatory approval.

According to Insider Monkey’s fourth quarter database, 95 hedge funds were long AppLovin Corporation (NASDAQ:APP), a significant increase from the previous quarter, when 51 funds had invested in the stock. Rajiv Jain’s GQG Partners was the biggest position holder in the company, with a $2.7 billion stake.

Overall, APP ranks 8th on our list of the best high growth large cap stocks to invest in. While we acknowledge the potential of APP to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than APP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.