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AppLovin and Day and Akamai have been highlighted as Zacks Bull and Bear of the Day

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For Immediate Release

Chicago, IL – May 23, 2024 – Zacks Equity Research shares AppLovin (APP - Free Report) , as the Bull of the Day and Akamai Technologies (AKAM - Free Report) , asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Shell plc (SHEL - Free Report) , BP plc (BP - Free Report) and Chevron Corp. (CVX - Free Report) .

Here is a synopsis of all five stocks:

Bull of the Day:

AppLovin is a Zack Rank #1 (Strong Buy) that engages in building a software-based platform for advertisers to enhance marketing and monetization.

The stock has become an AI play through its AI-powered software platform AXON. A combination of earnings momentum and the thirst for AI has helped investors see 2024 gains in APP of 100%.

While that move higher might scare some away, the company's momentum seems to have legs as analysts lift price targets and earnings estimates.

About the Company

AppLovin was founded in 2011, has a market cap of $27 billion, and employs over 1,700.

The company operates through two segments: Software Platform and Apps. Key software solutions include AppDiscovery for matching advertiser demand with publisher supply, MAX for optimizing ad inventory value through real-time auctions, Adjust for marketing analytics, and Wurl for distributing streaming video and providing advertising solutions.

Other offerings include SparkLabs for app store optimization, AppLovin Exchange for connecting buyers to mobile and CTV devices, and Array for app management. The company also runs various free-to-play mobile games.

The stock has a Zacks Style Score of “A” in Growth and Momentum. It sports a Style Score of “D” in Value, with a Forward PE of 28.

Q1 Earnings

In early May, APP reported a 17% EPS beat and a beat on revenues. Adjusted EBITDA came in at $549M, up 101% from last year, while margins were seen at 52%.

The company guided Q2 revenues above consensus, seeing $1.06-1.08B v the $998M expected.

Management attributed the success to improvements in the app ad market and a continued shift towards real-time bidding.

The stock reacted positively to the news, gapping up over 10%.

Estimates Rising

Since reporting earnings, analysts have been very positive, with many hiking estimates and price targets.

Over the last 30 days, estimates for the current quarter have gone up by 25%, from $0.59 to $0.74.

For the current year, numbers have been taken from $2.47 to $2.96. This is a 20% move higher over the last 30 days.

And for next year we see a similar trend, with estimates going up over 18% for that timeframe, moving from $3.01 to $3.57.

Along with estimates, several firms have upgraded their price targets for AppLovin:

-UBS increased its target to $100 from $55.

-Goldman Sachs raised its target to $100 from $73.

-Morgan Stanley adjusted its target to $80 from $70.

-Stifel Nicolaus upped its target to $98 from $85.

-Wedbush elevated its target to $100 from $87.

Overall, there is a trend of increased price targets and estimates, reflecting greater optimism among analysts.

The Technical Take

ApplLovin is up 100% in just five months, so a prudent investor will not want to chase. The stock is starting to pull back off the highs, so let us look at some buyable levels to target during a market sell-off.

The gap fill is $78.30, which was also the prior double top area before the earnings breakout. This is also aligned with the 21-day moving average (MA) which should see some short-term support.

The 50-day MA is $74.00 and the 200-day MA is $50.50. While the 200-day is unlikely anytime soon, investors could look for support in the $75 area.

If the stock continues to run higher, the long-term upside is substantial. The 161.8% Fibonacci extension, found drawing the $116.09 2021 highs to $9.14 2022 lows, is $183. This is another 125% higher than current trading levels.

In Summary

Overall, the bullish thesis on AppLovin is centered around its innovative AI-driven solutions, robust revenue growth, favorable market conditions, comprehensive product offerings, positive analyst sentiment, and strong market demand.

APP is up 100% this year, so investors should anticipate potential pullbacks and use those opportunities to position themselves for long-term gains.

Bear of the Day:

Akamai Technologies is a Zacks Rank #5 (Strong Sell) that provides cloud computing, security, and content delivery services globally. They offer solutions to protect websites, applications, and users from cyberattacks and online threats while improving performance.

About the Company

Akamai was founded in 1998, employs 10,000, and is headquartered in Cambridge, MA.

In addition to the services listed in the intro, Akamai provides services for web and mobile performance, media delivery (including video streaming), game and software delivery, and cloud computing. They also offer support to help customers integrate and manage their services effectively.

AKAM is valued at $14 billion and has a Forward PE of 15. The stock holds Zacks Style Scores of “A” in Growth, but “D” in Value and Momentum.

Q1 Earnings

Akamai's Q1 earnings report showed slightly better-than-expected earnings per share at $1.64 compared to estimates of $1.61, while revenue came in slightly below expectations at $987 million versus an estimated $989 million.

The company issued weak guidance for Q2, attributing it to a large social media customer optimizing costs and slowing traffic growth across the industry.

The guidance for Q2 included EPS of $1.51-1.56 versus the $1.62 expected and revenue of $967-986 million versus the $998M expected.

Additionally, they cut their FY24 revenue forecast to $3.95-4.02 billion from an estimated $4.09 billion.

The stock sold off over 10% after the report as analysts took estimates and price targets lower.

Earnings Estimates

Over the last 30 days, earnings estimates for the current quarter have fallen from $1.62 to $1.55, or 4%.

For the next quarter, estimates have fallen 10%, going from $1.73 to $1.56 over that same time frame.

For the current year, estimates have dropped from $6.76 to $6.32, or 7% over the last 30 days.

Looking at next year, estimates have the same trend lower. Over the last 30 days, numbers have fallen to $6.75 from $7.36, a move lower of 9%.

Price targets have come down along with the estimates:

-Susquehanna maintained a Net Positive with a price target of $135, down from $150.

-Citigroup has a Neutral rating on AKAM and has set a price target of $110, reduced from $117.

-RBC maintained a Sector Perform rating on AKAM, with a reduced-price target of $92 from $115.

Technical Take

The stock hit all-time highs in February but Q4 earnings took AKAM from $129 to $107. After some sideways action, the stock broke the 200-day moving average and clung to the $100 level.

After Q1 EPS, the stock is now trading below all moving averages and it is likely facing further downside until it can provide a quarter with positive earnings momentum.

For those interested in the name, they should have patience and wait for the $75-80 area. This level has shown support in the past and would be a good spot for a relief bounce.

In Summary

Akamai has posted back-to-back EPS disappointments and the stock is now down 25% since the February highs. Investors should stay away for now and wait for the Q2 results or buyable support levels to come.

Additional content:

AI & Big Data in Energy: 3 Oil & Gas Stocks to Keep an Eye On

Artificial intelligence (AI) and big data are rapidly transforming the energy sector not only by revolutionizing operations and enhancing efficiency but also by creating new opportunities for innovation and development.

Notably, exploration and production companies are leveraging AI algorithms for analyzing seismic data, optimizing drilling operations and predicting reservoir behavior. This reduces exploration risks while maximizing the recovery rate of hydrocarbons. Moreover, with the utilization of AI-powered drones and sensors across upstream operations, the identification of potential resource deposits is being done with greater accuracy and efficiency than traditional methods.

Considering the backdrop, investors should keep an eye on three energy stocks — Shell plc, BP plc and Chevron Corp.— as these leading oil and gas companies are using AI and big data to enhance their operations, boost efficiency and make data-driven decisions.

All the stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

3 Stocks Harnessing AI and Big Data

To reduce downtime and maintenance expenses,Shell is employing AI and big data analytics to predict equipment failures before they happen. In addition to preventing equipment breakdowns, predictive maintenance helps protect assets and enhance operational efficiency. Also, for analyzing seismic data, Shell is leveraging AI. This is accelerating the process of discovering oil and gas while reducing costs.

BP is using digital twins to generate virtual replicas of its production systems globally. This technology will enable the British energy giant to not only monitor but also optimize the performance of its oil rigs and refineries in real-time. Right from enhancing safety protocols to optimizing production processes, BP is employing data analytics for making data-driven decisions.

For driving efficiency, reducing costs and enhancing decision-making across its various operations, Chevron is at the forefront of incorporating AI and big data into its operations. For optimizing reservoir management processes, CVX is utilizing AI algorithms and advanced data analytics. To optimize drilling operations, the leading integrated energy company is also employing AI.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release.

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