- Hedge funds have piled into AppLovin, which helps apps monetize their offerings.
- Regulatory filings show Viking, D1, and Coatue started or grew positions in the fourth quarter.
- The stock has soared thanks to AI advances, returning more than 1,200% since the start of 2024.
Big-name managers spent the end of 2024 checking into the newest hedge fund hotel.
AppLovin, the mobile advertising platform apps use to monetize their offerings, has soared thanks to artificial intelligence advances that have pushed its advertising revenue up more than 70% year-over-year. The stock is up more than 1,200% since the start of 2024 and has not slowed down in 2025, despite some AI stocks struggling following the release of Chinese startup DeepSeek's models.
The company's stock is up nearly 50% this year, trading at more than $500 a share as of press time.
That's music to the ears of investors at funds like Viking Global, D1 Capital, Castle Hook, and others, all of which, according to regulatory filings, invested in the stock for the first time in the fourth quarter of 2024.
One prime broker who works with many of these managers told Business Insider that AppLovin is the new hedge fund hotel, a term that refers to stocks with a disproportionate amount of hedge fund ownership relative to the overall market. AppLovin is currently the largest holding in Goldman Sachs' Hedge Fund Industry ETF, which tracks top hedge fund picks.
Hedge fund hotels have been criticized as evidence of groupthink within the industry, but the smart money swarming to a name can also be a sign of an obvious winner. Nvidia, for example, was deemed a hedge fund hotel by the Financial Times in July 2023. The chipmaker's stock is up more than 200% since then.
Coatue and Lone Pine each got into AppLovin before the recent surge — in 2022's fourth quarter and 2023's first quarter, respectively, according to filings — but took different paths last quarter. Coatue, run by billionaire Philippe Laffont, added to its stake, buying more than 300,000 shares, while Lone Pine crystallized some of its gains, selling more than 1 million shares.
Still, Lone Pine owned a position worth more than $300 million in the company at the end of 2024. Similarly, Alex Sacerdote's Whale Rock sold more than 1 million shares last quarter but still held a position worth more than $500 million at the end of the year. Whale Rock first bought the stock in the first quarter of 2024.
D1 and Whale Rock declined to comment. Viking, Castle Hook, Coatue, and Lone Pine did not immediately respond to requests for comment.
While the company's market capitalization has soared to more than $170 billion, putting it ahead of names like Verizon, Caterpillar, and Uber, investors believe it still has room to grow.
Polar Capital, a $30 billion asset manager with dozens of thematic funds, wrote in its Global Technology Fund's November investor letter that AppLovin's algorithm improvements "were described as a 'step change' that management expects to see periodically going forward."
"Management also remains confident in the sustainability of 20-30% ad network growth based on the gaming business alone, while early testing in e-commerce advertising has been positive with a full launch expected in 2025," the letter continues.
Others are projecting even bigger things.
AppLovin "is such an amazing story and honestly perhaps a contender for the 8th 'MAG' stock," market commentator James van Geelen's Citrini Research posted on X last week, referring to the Magnificent 7 stocks that have been among the biggest market winners over the past two years.
