Both AppLovin Corporation (APP) and Arm Holdings plc (ARM) are pivotal tech players leveraging AI advancements. AppLovin’s AI-driven advertising strategies, particularly its Axon 2 engine, have significantly boosted ad performance and financial growth, with an impressive 77% revenue increase in Q2 2025. In contrast, Arm’s energy-efficient chip architectures support AI applications across major firms like Apple and Qualcomm, positioning it as a vital resource for the tech sector. However, ARM faces challenges, especially in China due to the rising RISC-V architecture, which could hinder future growth. Zacks estimates show APP exhibiting a notable 17% revenue increase and 98% surge in earnings this year, contrasting with ARM’s expected 18% sales growth and 3% EPS rise. Valuation metrics favor AppLovin, making it an attractive prospect for AI-focused investors, reflected in its Zacks Rank #1 (Strong Buy), while ARM holds a Zacks Rank #3 (Hold). For optimal returns in the AI-driven space, AppLovin stands out.
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