AI Surge: Investors Eye AppLovin and CoreWeave Opportunities

AI is transforming industries, and experts estimate generative AI revenue could reach $1.1 trillion by 2028. Companies like AppLovin and CoreWeave are poised to benefit significantly from this trend, presenting opportunities for investors.

Date: 30-05-2025

AI Rating: 7

Earnings Per Share (EPS)
AppLovin reported GAAP earnings climbing 149% to $1.67 per diluted share. This substantial increase indicates strong operational leverage, which can boost investor confidence. Moreover, the guidance for a 69% growth in advertising sales for the upcoming quarter further enhances the positive sentiment around their EPS outlook.
Revenue Growth
In Q1, AppLovin experienced a revenue increase of 40% to $1.4 billion, driven primarily by its advertising segment. Given these figures, the company appears to be successfully transitioning from its declining mobile games portfolio to a more robust advertising model. Additionally, CoreWeave's revenue soared 420% to $981 million in the same period, which signals strong market demand, particularly in AI-driven cloud services. Such explosive growth rates are highly attractive to investors looking for promising opportunities in the tech space.
Net Income
While AppLovin's management has shown a positive outlook, the focus on top-line growth over immediate profitability may concern conservative investors. CoreWeave, however, reported a non-GAAP loss of $150 million, exacerbated by substantial debt obligations, suggesting risk factors that potential investors should weigh carefully.
Profit Margins
AppLovin has maintained good profit margins, particularly in its advertising segment, which will be bolstered by its focus on AI. In contrast, CoreWeave reported a gross margin of 73% which, despite its losses, showcases the potential for solid profitability should revenues continue to climb.
General Outlook
The general sentiment revolving around AI and the potential of revenue growth rates suggests an optimistic forecast for these stocks. Nonetheless, the level of debt and ongoing losses associated with CoreWeave could deter some investors. Long-term investment in these companies may take advantage of short-term volatility to secure a position in rapidly growing sectors.

Stocks: APP CRWV