In the realm of Artificial Intelligence (AI), amidst the flashy headlines and buzz, there exist two unsung heroes quietly revolutionizing their domains: Applovin and Xometry. While the spotlight often shines on the giants of the AI industry, these under-the-radar companies are making significant strides, backed by solid performance and genuine innovation.

Let's dive into the world of these two companies, exploring their backgrounds, Business models, and why they could be compelling investment opportunities.

AppLovin: Making Waves in the App Economy

AppLovin, a player in the mobile app ecosystem, may not be a household name, but its impact is unmistakable. With a portfolio of around 200 mobile games, AppLovin generated over $1.4 billion in revenue in 2023 alone. However, it's not just about the games; AppLovin leverages its apps to gather valuable data, fueling its AI-driven software business.

The Business Model:

Companies flock to AppLovin for assistance in getting their apps noticed. AppLovin's AppDiscovery software, powered by AI, aids in app discovery and user engagement. Despite a sluggish mobile app economy, AppLovin continues to thrive, experiencing robust revenue growth.

Financial Performance:

In 2023, AppLovin's software revenue surged by 76% year-over-year, reaching $1.8 billion. What's more, its software business boasts higher margins compared to its app business, propelling its profitability. With a net income exceeding $350 million in 2023, AppLovin demonstrates both growth and financial stability.

Investment Potential:

Trading at just 15 times its expected earnings, AppLovin presents a compelling investment opportunity in the AI space. Its strong financials, coupled with its AI-driven growth strategy, position it as a promising player in the market.

Xometry: Transforming Manufacturing with AI

While the manufacturing industry may seem impervious to tech disruption, Xometry is challenging this notion. Leveraging AI since before it went public in 2021, Xometry operates an online marketplace for custom manufacturing, powered by AI-driven pricing.

The Business Model:

Xometry's platform enables instant price quotes for custom manufacturing jobs, courtesy of its AI algorithms. By connecting buyers with third-party manufacturers, Xometry facilitates transactions while earning revenue from the price spread.

Financial Performance:

With consistent revenue growth and improving gross margins, Xometry's financials indicate the effectiveness of its AI software. Despite operating in a historically resistant industry, Xometry's AI-driven approach positions it for disruption and growth.

Investment Potential:

Trading at less than 2 times sales, Xometry presents an attractive investment opportunity for those seeking exposure to AI-driven innovation in manufacturing. Its financial performance and disruptive potential make it a compelling prospect in the market.

Unveiling Hidden Gems in the AI Landscape

In a landscape dominated by headline-grabbing AI behemoths, it's easy to overlook the hidden gems like AppLovin and Xometry. These companies, while lesser-known, are driving real innovation and delivering tangible results.

Investors seeking opportunities in the AI space should look beyond the hype and consider the fundamentals. With solid financial performance, innovative business models, and AI-driven strategies, both AppLovin and Xometry present compelling investment cases.

In a world where hype often obscures reality, these unsung heroes of AI offer a refreshing reminder that true value lies not in the spotlight, but in the substance of innovation and execution. As the AI revolution continues to unfold, let's not overlook the hidden gems paving the way for a smarter future.

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