10 Best Advertising and Ad Tech Stocks To Buy Now
In this article, we will discuss the 10 best advertising and ad tech stocks to buy now. You can skip our detailed analysis of the advertising industry and go directly to the 5 Best Advertising and Ad Tech Stocks To Buy Now.
Global Advertising Market, How Much Is It Worth?
According to the Global Advertising Market report, the global advertising market was valued at $647 billion in 2020. According to Magna, a leading global media intelligence agency, global media companies’ advertising revenues went up by 22% from 2020 valuations in 2021, amounting to over $710 billion. Advertising sales from TV, radio, print, and cinemas saw a 9% upside from 2020 levels and were valued at $268 billion, while digital advertising formats generated revenues of $442 billion in 2021, up 31% from 2020 levels.
Digital Marketing Revenues
A major factor driving the growth of the global advertising industry is the benefits of digital marketing and how it has accelerated and optimized the way businesses reach consumers. According to Statista, global spending on digital advertising was valued at roughly $378 billion in 2020 and went up to $455 billion in 2021. Alphabet Inc. (NASDAQ:GOOGL) reported digital advertising revenues of $146 billion in 2021 while Meta Platforms, Inc. (NASDAQ:FB) and Amazon.com, Inc. (NASDAQ:AMZN) generated digital advertising revenues of $84 billion and $31.2 billion, respectively, in 2021.
The Future Of Advertising
Businesses are working on finding new ways to gauge consumer interest and deliver targeted content without the use of third-party cookies. Contextual advertising is becoming increasingly popular in the industry as businesses shift toward an advertising strategy that sits well with consumers’ privacy concerns. According to a GumGum report, 61% of U.S. advertising companies are spending on contextual advertising, and 24% of them have increased the spending budget for context-based advertisements.
The rise in popularity of first-party data, the integration of artificial intelligence in digital marketing, and data-driven connected TV are some of the key contributors to the lucrative future the advertising industry holds. According to GlobalData, advertising technology will catapult the advertising industry from a billion-dollar industry in 2021 to a trillion-dollar industry by 2030.
Major tech giants such as Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOGL), and Amazon.com, Inc. (NASDAQ:AMZN) are working on innovative solutions to drive the growth of internet advertising. Read on to learn about more companies active in the space.
Photo by Joshua Earle on Unsplash
To determine the 10 best advertising and ad tech stocks to buy now, we studied industry analysis reports published by accredited market intelligence agencies. We identified key players in the advertising space and looked into the technological advancements they are working on to reshape internet advertising, in addition to studying their business models and financial reports. We also gave weight to the analyst and investor sentiment for each stock.
10 Best Advertising and Ad Tech Stocks To Buy Now
10. PubMatic, Inc. (NASDAQ:PUBM)
Number of Hedge Fund Holders: 20
PubMatic, Inc. (NASDAQ:PUBM) develops online advertising software and strategies for the digital publishing and advertising industry. This February the company reported earnings for the fiscal fourth quarter of 2021 in which the company beat EPS estimates by $0.23. PubMatic, Inc. (NASDAQ:PUBM) reported revenues of $75.56 million, up 34.34% year over year from $56.24 million, and reported earnings per share of $0.50 for the quarter.
On March 16, 2022, RBC Capital analyst Matthew Swanson lowered his price target on PubMatic, Inc. (NASDAQ:PUBM) to $38 from $46 while maintaining an Outperform rating on the shares. The analyst believes that the company’s recent quarterly earnings and market positioning are undervalued and the stock is bound for profitable growth. As of April 10, 2022, PubMatic, Inc. (NASDAQ:PUBM) has gained 8.21% over the past six months.
By the end of the fourth quarter of 2021, PubMatic, Inc. (NASDAQ:PUBM) was found on 20 hedge fund portfolios that held combined stakes of $109.75 million in the company. This is compared to 15 positions in the third quarter with collective stakes amounting to $33.81 million.
Renaissance Technologies initiated a position in PubMatic, Inc (NASDAQ:PUBM) in Q4 2021. PubMatic, Inc. (NASDAQ:PUBM) are worth $23.17 million, making Renaissance Technologies the most prominent stakeholder in the company.
9. Magnite Inc. (NASDAQ:MGNI)
Number of Hedge Fund Holders: 25
Magnite, Inc. (NASAQ:MGNI) is an advertisement technology company which operates an independent sell-side advertising platform in the United States and internationally. The company’s platform offers applications and services for sellers of digital advertising inventory. This February, Magnite, Inc. (NASDAQ:MGNI) announced that it has acquired Carbon, a platform that enables publishers to measure, manage, and monetize audiences in real-time. With Magnite, Inc.’s (NASDAQ:MGNI) professional presence and Carbon’s publisher-first technology, media owners and advertisers can target audiences and enhance the value of their advertising without relying on third-party cookies.
On February 23, 2022, Magnite, Inc. (NASDAQ:MGNI) reported earnings for the fiscal fourth quarter of 2021 for which the company outperformed the market. The company’s earnings per share came to $0.26, beating estimates by $0.01. Magnite, Inc. (NASDAQ:MGNI) generated quarterly revenues of $142.10 million, up 73.28% year over year, outperforming market consensus by $2.25 million. Moreover, this February, Craig-Hallum analyst Jason Kreyer lowered his price target on Magnite, Inc. (NASDAQ:MGNI) to $25 from $45, while maintaining a Buy rating on the shares. The analyst noted that as supply-chain constraints ease, the company is well-positioned for growth given a conservative set of estimates and attractive valuation for the stock.
According to Insider Monkey’s database, 25 hedge funds held stakes in Magnite, Inc. (NASDAQ:MGNI) worth $148.65 million at the close of the fourth quarter of 2021. Of these, Nine Ten Partners was the most prominent shareholder in the company owning over 2.3 million shares of stock which amount to a stake of $41.41 million in the company.
Here is what Alger, an investment management firm, had to say about Magnite, Inc. (NASDAQ:MGNI) in its second-quarter 2021 investor letter:
“Magnite provides an advertising supply side platform for publishers. The technology helps publishers such as network television stations or cable news providers automate the sale of digital advertising inventory across different formats and channels, like desktop, mobile, video, audio, connected TV and over-the-top TV. Publishers monetize their digital advertising inventory by using Magnite’s platform to access a global market of ad buyers, including advertising agencies that use supply side platforms. Magnite also helps sellers decrease costs and protect their brands and user experience. Magnite receives ad inventory from sellers and optimizes publishers’ revenue yields by processing the highest buyer bids. Currently, Magnite keeps approximately 10% of ad spend as revenue (i.e. take rate) and passes on the remainder of the ad spend to publishers. Magnite’s clients include many of the world’s leading publishers of websites and mobile applications and the company believes that its platform reaches approximately 1billion individuals globally.
Shares of Magnite underperformed in the second quarter due to the growth market selloff and slower-than-expected growth in connected TV during the first three months of this year. We believe the 32% growth in connected TV was below expectations and due to a one-time issue with one of the company’s publishing partners that ran out of advertising inventory. Management noted the issue has been fixed and the company saw strong reaccelerating growth in April. Additionally, we believe Magnite’s recent acquisition of video advertising company SpotX will significantly bolster the company’s positioning within connected TV, a high-growth area of the digital advertising market that is taking share from linear TV ad budgets.”
8. Digital Turbine, Inc. (NASDAQ:APPS)
Number of Hedge Fund Holders: 31
Digital Turbine, Inc. (NASDAQ:APPS) is a digital marketing company that delivers end-to-end products and solutions for mobile operators, original equipment manufacturers, and third parties to enable the monetization of mobile content. 31 hedge funds were bullish on Digital Turbine, Inc. (NASDAQ:APPS) by the end of the fourth quarter of 2021. The total stakes of these hedge funds amounted to $246.19 million, up from $209.15 million in the preceding quarter with 19 positions.
For the fiscal third quarter of 2022, Digital Turbine, Inc. (NASDAQ:APPS) generated revenues of $375.49 million, up 323.84% year over year, and outperformed market consensus by $22.28 million. The company reported an EPS of $0.49, beating estimates by $0.06.
On February 9, 2022, Maxim analyst Allen Klee lowered his price target on Digital Turbine, Inc. (NASDAQ:APPS) to $108 from $132 but reiterated a Buy rating on the shares after the company’s quarterly earnings outperformed the market. The analyst commented that Digital Turbine, Inc. (NASDAQ:APPS) has grown into a billion-dollar annual revenue company, boasting a diverse portfolio of mobile ad-tech solutions and competitive advantages with SingleTap, customer data, and independence with limited exposure to Apple Inc.’s (NASDAQ:AAPL) IDFA privacy rule changes.
Greenhaven Road Investment Management is the dominating shareholder in Digital Turbine, Inc. (NASDAQ:APPS). The fund’s stakes in the company came to $85.38 million, which covers 19.23% of its Q4 2021 investment portfolio.
Digital Turbine, Inc. (NASDAQ:APPS) is innovating in the digital marketing space. Other key players in the advertising industry include Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOGL), and Amazon.com, Inc. (NASDAQ:AMZN).
GreenWood Investors, an investment management firm, mentioned Digital Turbine, Inc. (NASDAQ:APPS) in its fourth-quarter 2021 investor letter. Here’s what the firm had to say:
“A great example of a combined growth, value and quality stock is a recent addition to the portfolio, Digital Turbine (APPS). The company has made two acquisitions which nearly tripled the revenue of the company while only increasing the shares outstanding by 11%. Its core technology, installed directly on 0.8 billion Android devices (soon to be 1.6 billion), allows it to truncate the multi-step process of installing a mobileapplication from an ad into one seamless step. Not only is the technology better than what vertically-integrated Apple can offer, but it significantly improves advertiser outcomes, by a factor of 2-5x. Most of those improved economics will begin accruing to Digital Turbine in the year ahead.”
7. The Trade Desk, Inc. (NASDAQ:TTD)
Number of Hedge Fund Holders: 32
Trade Desk, Inc. (NASDAQ:TTD) operates a cloud-based platform that allows buyers to create, manage, and optimize data-driven digital advertising campaigns across various ad formats and channels, including display, video, audio, native, and social. On March 2, 2022, Guggenheim analyst Michael Morris initiated coverage of Trade Desk, Inc. (NASDAQ:TTD) with a Buy rating and a $108 price target.
This February, Trade Desk, Inc. (NASDAQ:TTD) reported Q4 2021 earnings for which the company beat on both EPS and revenue. The company reported revenues of $395.60 million, up 23.66% year over year, and beat revenue estimates by $5.96 million. The company reported earnings per share of $0.42 and beat expert EPS estimates by $0.14.
Zevenbergen Capital Investments is the largest stakeholder in Trade Desk, Inc. (NASDAQ:TTD) having stakes of more than $326 million in the ad-tech company. In addition to Zevenbergen Capital, 31 other hedge funds held stakes in Trade Desk, Inc. (NASDAQ:TTD) at the end of the fourth quarter of 2021. The combined value of these stakes came to $830.59 million, up from $499.10 million in the prior quarter with 19 positions.
Here is what Richie Capital Group had to say about Trade Desk, Inc. (NASDAQ:TTD) in its fourth-quarter 2021 investor letter:
6. Omnicom Group Inc. (NYSE:OMC)
Number of Hedge Fund Holders: 33
Omnicom Group Inc. (NYSE:OMC) provides advertising, marketing, and corporate communications services. This March, Omnicom Group Inc. (NYSE:OMC) announced that it has acquired TA Digital, a digital marketing company, to expand its digital transformation, content management, commerce, and customer experience capabilities.
This February, Omnicom Group Inc. (NYSE:OMC) announced that its earnings per share for the fiscal fourth quarter of 2021 came to $2.11, beating estimates by $0.40. The company generated revenues of $3.86 billion, up 2.63% year over year, and beat revenue estimates by $184.27 million. As of April 10, 2022, the stock has gained 3.51% over the past six months, and the company’s market cap stands at $16.12 billion.
On March 18, 2022, Argus analyst Kristina Ruggeri upgraded Omnicom Group Inc. (NYSE:OMC) to Buy from Hold with a $95 price target. The analyst sees Omnicom Group Inc. (NYSE:OMC) positioned to benefit from recent trends in e-commerce marketing and data analytics, also noting the company’s strategic acquisitions which will further accelerate its growth in the industry. The analyst further emphasized that the company pays attractive dividends, and as of April 10, 2022, Omnicom Group Inc. (NYSE:OMC) has a forward dividend yield of 3.59%.
Omnicom Group Inc. (NYSE:OMC) is becoming a popular stock pick among investor circles, and the investor sentiment for the stock is positive. As of the fourth quarter of 2021, 33 hedge funds held stakes in Omnicom Group Inc. (NYSE:OMC) worth more than $404.52 million. This is compared to 25 positions in Q3 2021, with stakes of more than $396.36 million.
As of April 4, 2022, AQR Capital Management is the most prominent shareholder in Omnicom Group Inc. (NYSE:OMC) having stakes worth $65.99 million. The fund upped its Q3 2021 stakes in the company by 55%, and as of Q4 2021, Omnicom Group Inc. (NYSE:OMC) makes up 0.11% of AQR Capital’s 13F portfolio.
Like Meta Platforms, Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOGL), and Amazon.com, Inc. (NASDAQ:AMZN), Omnicom Group Inc. (NYSE:OMC) is one of the best ad tech stocks to buy now.
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Disclosure: None. 10 Best Advertising and Ad Tech Stocks To Buy Now is originally published on Insider Monkey.