The technology services industry is mature, with demand for services in good shape. Revenues, income and cash flows are anticipated to gradually returned to the pre-pandemic levels, enabling most industry players to pay out stable dividends. As a result, the industry flourished in 2024. The momentum gathered more pace in the first half of 2025.
The Zacks-defined Technology Services industry currently ranks within the top 16% of Zacks Ranked Industries. Consequently, we expect it to outperform the market over the next three to six months. We recommend two artificial intelligence (AI)-powered technology services bigwigs with a top Zacks Rank and solid price upside in the short term.
These two stocks are: AppLovin Corp. APP and Duolingo Inc. DUOL. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The global shift toward digitization creates opportunities in various markets, including 5G, blockchain and AI. Companies are adopting generative AI, machine language (ML), blockchain and data science faster to gain a competitive advantage.
The business software industry is gaining from robust demand for multi-cloud-enabled software solutions, given the ongoing transition from legacy platforms to modern cloud-based infrastructure.
Industry players are incorporating AI and ML into their applications to achieve more dynamic and result-oriented outcomes. Elevated demand for enterprise software, which is ramping up productivity and improving the decision-making process, is a key catalyst.
Zacks Rank #1 AppLovin is engaged in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally. APP provides a technology platform that enables developers to market, monetize, analyze and publish their apps.
AppLovin’s last reported financial results demonstrate its strong fundamentals and growth potential. The introduction of APP’s AI-powered AXON 2.0 technology and strategic expansion in gaming studios have significantly boosted revenue growth. APP’s AI-enabled Audience+ marketing platform is also increasing its reach into the direct-to-consumer and e-commerce space.
The average short-term price target of brokerage firms represents an increase of 37% from the last closing price of $341.64. The brokerage target price is currently in the range of $200-$650. This indicates a maximum upside of 90.3% and a downside of 41.5%.
