Prediction: 2 Stocks That Will Be Worth More Than AppLovin 2 Years From Now

AppLovin (NASDAQ: APP), a publisher of mobile games and app monetization tools, went public on April 15, 2021, at $80. Today, its stock trades at about $315 -- so a $10,000 investment would have grown to over $39,000 in less than four years.

Back in 2022, AppLovin's revenue growth flatlined and it racked up a net loss as it grappled with inflation, rising rates, and other macroeconomic headwinds for the digital advertising market. That pressure offset all of its inorganic gains from its $1.1 billion takeover of MoPub. But in 2023, its revenue rose 17% and it turned profitable again as the digital advertising market stabilized.

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In 2024, AppLovin's revenue surged 43%, its net income skyrocketed 343%, and its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 81%. That growth was driven by the growing adoption of its artificial intelligence (AI)-powered AXON ad discovery services and a warming micro environment.

Image source: Getty Images.

AppLovin still has a bright future. From 2024 to 2027, analysts expect its revenue and adjusted EBITDA to grow at a compound annual growth rate (CAGR) of 20% and 31%, respectively. But with a market cap of $107 billion, it doesn't look cheap trading at 19 times this year's sales.

If it matches those expectations and maintains the same forward valuations, its market cap could rise about 44% to $154 billion by the beginning of 2027. Yet if it trades at a more modest 10 times forward sales, its market cap could shrink 24% to $81 billion. So instead of chasing AppLovin at these frothy levels, it might be smarter to invest in two less valuable tech companies that might eclipse this hot stock's market cap in two years: Baidu (NASDAQ: BIDU) and CrowdStrike (NASDAQ: CRWD).

Baidu

Baidu owns China's largest search engine, but it only has a market cap of $33 billion and trades at 9 times forward earnings and 2 times this year's sales. Three major challenges are compressing its valuations: competition from mobile "super-apps" like Tencent's (OTC: TCEHY) WeChat, the rise of new generative AI platforms that are changing how people search for information, and soft demand for Chinese equities amid the protracted tech and trade war between the U.S. and China.

Those challenges are daunting, but Baidu recently launched two new AI models -- Ernie 4.5, the latest version of its foundational AI platform; and Ernie X1, an advanced reasoning model that targets DeepSeek and other generative AI services -- to keep pace with that evolving market. It's also expanding its mobile app, which served 679 million monthly active users at the end of 2024, and rolling out more managed business pages for companies to curb their dependence on search and display ads. It also recently acquired Joyy's streaming video business in China to complement its iQiyi video platform and widen its moat against ByteDance's Douyin (known as TikTok overseas) and other online video competitors.

In 2024, Baidu's revenue dipped 1% -- but its cost-cutting initiatives and buybacks still boosted its earnings per share (EPS) by 20%. From 2024 to 2026, analysts expect its revenue and EPS to grow at a CAGR of 4% and 2%, respectively. Those growth rates aren't impressive, but its business isn't crumbling either. If it matches those estimates, grows its revenue by another 4% in 2027, and trades at a more generous 4 times sales, its market cap could rise to about $83 billion over the next two years. If its AI efforts take off, its growth could accelerate at a faster-than-expected rate and its stock could fetch an even higher valuation.

CrowdStrike

CrowdStrike, one of the world's top cybersecurity companies, has a market cap of $90 billion. Unlike its older peers, which still install on-site appliances, CrowdStrike only provides its endpoint security tools as cloud-based services on its Falcon platform. That approach is stickier, generates predictable recurring revenue, drives its clients to install more cloud-based modules, and is usually easier to scale as an organization expands.

From fiscal 2021 to fiscal 2025 (which ended this January), CrowdStrike's revenue and adjusted EBITDA grew at a CAGR of 46% and 79%, respectively. The percentage of its customers using at least five of its modules also rose from 47% at the end of fiscal 2021 to 67% at the end of fiscal 2025. From fiscal 2025 to fiscal 2028, analysts expect its revenue and adjusted EBITDA to rise at a CAGR of 22% and 20%, respectively, as it turns consistently profitable in fiscal 2027 and fiscal 2028.

CrowdStrike's business is gradually maturing and its stock isn't cheap at 19 times this year's sales. But if it matches analysts' expectations and maintains the same forward valuations, its market cap could surge more than 50% to $138 billion by the beginning of fiscal 2028. The ongoing expansion of the cybersecurity market, along with its early-mover's advantage in the cloud-native niche, could justify that premium valuation and lift its market cap past AppLovin's over the next two years.

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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AppLovin, Baidu, CrowdStrike, and Tencent. The Motley Fool recommends iQIYI. The Motley Fool has a disclosure policy.