Artificial Intelligence and Leading Crypto Technology Stocks: AppLovin, MicroStrategy, Palantir, Nvidia

Artificial Intelligence is still an abstract concept for many ordinary consumers who are unsure of how it will change their lives. But there is no doubt about whether companies find value in it.

Some of the biggest winners in this year's stock market rally, which saw the Nasdaq rise 33% and other US indexes post double-digit gains, have direct ties to rapid advances in artificial intelligence. Chip maker Nvidia Among them, but he is not alone.

Another notable topic that drove outperformers this year is cryptocurrencies. Starting with the launch of Bitcoin spot exchange-traded funds in January, cryptocurrencies saw significant success in 2024, punctuated by Donald Trump's election victory, which was heavily funded by the cryptocurrency industry. A number of cryptocurrency-related stocks got a big boost.

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

AppLovin It entered the year with a market capitalization of about $13 billion and is best known for investing in a group of mobile gaming studios that have produced titles such as “Woody Block Puzzle,” “Clockmaker,” and “Bingo Story.”

Coming out of the year, AppLovin's value had risen to over $110 billion, making it worth more than Starbucks, Intel and Airbnb. At Tuesday's close, AppLovin shares were up 758% this year, far outpacing all other tech companies.

While AppLovin went public in 2021, riding on the wave of excitement in online gaming in the Covid era, the business is now centered around online advertising and booming 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 gaming apps owned by the company and also used by studios that license the technology. The software platform's third-quarter revenue rose 66% to $835 million, outpacing overall growth of 39%.

Net income in the quarter rose 300%, raising the company's profit margin to 36.3% from 12.6% during the year.

AppLovin CEO Adam Foroughi, whose net worth has swelled to more than $10 billion, is getting more excited about what's to come. At the company's earnings conference call in November, Foroughi praised an e-commerce pilot project that allows companies to serve targeted ads in games.

“In all my years, this is the best product I've ever seen, the fastest growing, but it's still in beta,” he said.

After rising 346% in 2023, it was hard to imagine Microstrategy Find other equipment inventory. But she did.

The company's stock price has jumped 467% this year on the back of a Bitcoin buying strategy that made founder Michael Saylor a hero in the cryptocurrency space.

In mid-2020, the company announced a plan to start purchasing Bitcoin. Up until that point, MicroStrategy had been an average seller of business intelligence software, but since then, it has purchased more than 444,000 bitcoins, using its ever-rising stock price as a way to sell shares, increase debt, and buy more coins.

It is now the world's fourth-largest holder of bitcoin, behind only its creator Satoshi Nakamoto, BlackRock's iShares Bitcoin Trust, and cryptocurrency exchange Binance, with a stock valued at nearly $44 billion. MicroStrategy's market cap has swelled from about $1.1 billion when it was just a software company to $80 billion today.

While the demonstration had been ongoing 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 “scam,” but it was the industry's preferred choice in this election and was strongly supported by some prominent players, including Coinbase.

“With the red sweep, Bitcoin is going up strongly, and the rest of the digital assets will also start going up,” Saylor told CNBC shortly after the election. Bitcoin remains the “safety trade” in the cryptocurrency space, but as a “digital asset framework” is put in place for the broader cryptocurrency market, “there will be a boom in the entire digital asset industry,” he said.

Palantir It made a lot of big hits in 2024 on its way to a 380% gain in its stock price. One of its best stretches came last month, when the software company boosted its revenue forecast a day before the presidential election.

The company, which sells data analysis tools to defense agencies, met its 2024 target, with fourth-quarter guidance that beat analysts' estimates. Palantir also topped its third-quarter results, with CEO Alex Karp declaring in the earnings release, “We absolutely gutted ourselves this quarter, driven by relentless demand for AI that's not slowing down.”

The stock jumped 23% after the earnings report and then another 8.6% the next day after Trump won. Peter Thiel, Palantir's co-founder and board member, was a big supporter of Trump in the 2016 campaign and helped organize a meeting with technology executives at Trump Tower shortly after that election. Karp was one of those present.

However, Karp has publicly supported Vice President Kamala Harris, the Democratic nominee, in the 2024 campaign. Thiel's past support for Trump and the ensuing backlash made it “more difficult to get things done,” he told The New York Times in an August story.

However, Wall Street rallied behind Palantir after the election due to optimism that more military spending would flow into the company.

Karp's comments in the pre-election earnings report suggest the company will be fine either way.

“Our business growth is accelerating, and our financial performance is exceeding expectations as we meet consistent demand for the most advanced AI technologies from our U.S. government and commercial customers,” Karp said in a letter to shareholders.

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

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

Investors surpassed these numbers a few days later, sending the stock up 20% after Trump won the election, as all things crypto-related soared. One of Robinhood's biggest growth drivers is cryptocurrencies, which retail investors can easily purchase via the app, along with their stocks.

Revenue from cryptocurrency transactions jumped 165% in the third quarter compared to the previous year to reach $61 million, representing 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 cryptocurrencies are more than just an investment but also a “disruptive technology that will change the underlying infrastructure under payments, loans 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, the year the company went public.

Robinhood's rise this year has surpassed that of Coinbase, which jumped 61%. But with a market cap of $70 billion, Coinbase is still worth double.

Nvidia The amazing run continues.

After last year's 239% gain, fueled by excitement around generative AI, Nvidia is up another 183% this year, adding a whopping $2.2 trillion in market cap.

Twice this year, Nvidia has been named the world's most valuable publicly traded company. apple It jumped ahead and is approaching $4 trillion, with Nvidia at $3.4 trillion and Microsoft Worth $3.3 trillion.

Nvidia remains the biggest beneficiary of the AI ​​boom, with the biggest cloud vendors and internet companies buying up all the GPUs they can find. Annual revenue has increased by at least 94% in each of the past six quarters, with growth exceeding 200% three times during that period.

A next-generation AI chip called Blackwell is in “full production,” CEO Jensen Huang said in the company's latest earnings report. Chief Financial Officer Colette Kress said the company is on track to generate “several billion dollars” in revenue for Blackwell in the fourth quarter.

“Every customer is racing to be first to market,” Chris said. “Blackwell is now in the hands of all of our key partners, and they are developing their own data centers.”

While growth is expected to remain strong for a company of Nvidia's size, an inevitable slowdown is coming. Analysts expect a year-on-year slowdown over the next few quarters, with growth falling to the mid-40s by the second half of next year.

Nvidia relies on a significant amount of revenue from a handful of tech giants, so any economic fluctuations pose a significant risk to investors.

That helps explain why Nvidia wants to tell Wall Street about the vast 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 a “stock picking market”