AppLovin and The Trade Desk Face Stock Market Volatility

AppLovin and The Trade Desk stock have shown marked volatility as advertising tech continues to grow, with AppLovin's net income soaring and EPS expected to rise significantly. Investors ponder if now is the time to consider these stocks amidst a market correction.

Date: 22-03-2025

AI Rating: 7

Earnings Insights
AppLovin's net income soared by 343% year-over-year for 2024, indicating strong profitability. This significant increase in net income, coupled with a projected 69% rise in earnings per share (EPS) to $7.65 for 2025, paints a very positive picture for AppLovin as a potential investment option.

In contrast, The Trade Desk reported a 32% growth in adjusted EPS for 2024. However, this growth disappointed due to not meeting higher expectations set by analysts, highlighting a potential concern for its future performance.

Growth Potential
Both companies are part of the burgeoning adtech sector, which is approaching a total addressable market of $1 trillion. AppLovin's focus on mobile advertising and advancements in AI technology through its AXON 2.0 engine contribute to its robust revenue surge of 75% in 2024. The projected revenue growth of 21% for 2025 further exemplifies its growth trajectory.

Meanwhile, The Trade Desk experienced a revenue increase of 26% in 2024, but the slowdown against expectations may instill caution among investors. The entry of AppLovin into the Connected TV (CTV) market could complicate The Trade Desk's continuing dominance in this area.

Comparative Analysis
AppLovin currently trades at a higher valuation compared to The Trade Desk, with a forward price-to-earnings (P/E) ratio of 36 against The Trade Desk's 30. This difference indicates that while AppLovin's growth metrics are impressive, investors may perceive The Trade Desk as more attractively priced given its scale and partnerships with major brands.

Stocks: APP TTD