Applovin-Big-name managers are piling into adtech stock AppLovin, the newest hedge fund hotel

Core Insights - AppLovin has experienced a significant surge in stock price, increasing over 1,200% since the beginning of 2024, driven by advancements in artificial intelligence that boosted its advertising revenue by more than 70% year-over-year [1][9] - The company's stock is currently trading at over $500 per share, reflecting a nearly 50% increase this year, attracting investments from notable hedge funds such as Viking Global, D1 Capital, and Castle Hook [2][9] - AppLovin is recognized as a "hedge fund hotel," indicating a high level of hedge fund ownership relative to the overall market, and is the largest holding in Goldman Sachs' Hedge Fund Industry ETF [3][9] Investment Activity - Hedge funds like Coatue and Lone Pine have shown varied strategies regarding their positions in AppLovin, with Coatue increasing its stake by purchasing over 300,000 shares, while Lone Pine sold more than 1 million shares but still held a position worth over$ 300 million at the end of 2024 [5][6] - Whale Rock also sold over 1 million shares last quarter but maintained a position valued at more than $500 million, having initially bought the stock in the first quarter of 2024 [6] Market Position and Growth Potential - AppLovin's market capitalization has surpassed$ 170 billion, outpacing companies like Verizon, Caterpillar, and Uber, with analysts believing there is still significant growth potential [7] - Polar Capital highlighted in its investor letter that AppLovin's algorithm improvements are expected to lead to sustainable ad network growth of 20-30%, particularly in the gaming sector, with positive early testing in e-commerce advertising [7] - Market commentators suggest that AppLovin could be a contender for the next "MAG" stock, joining the ranks of the Magnificent 7 stocks that have been major market winners [8]