Revisiting the App Revolution

Come meet me right now for this week’s official Live Q&A Chat  in the Trading With Cody Chat Room and on the Trading With Cody app or email me your question and I’ll include it in the transcript later.

Today’s report:

Are people facing App Burnout? Yes. Are a lot people using Facebook less today than they were six months ago? Maybe.

But the App Revolution is still burgeoning and every serious investor needs to continue to account for it. This App Revolution is indeed the one I kept telling people to “get in front of ” as I promised it would create trillions of dollars of market valuation in the years and decades ahead. I realized last night, that we’ve already seen trillions of dollars in market valuation created by the App Revolution and that it’s still going to get bigger.

Let’s run through some of the publicly-traded companies that I’ve cited as ways to invest in the App Revolution over the years and you’ll see — we’ve already seen a trillion dollars of App Revolution valuation created. I’ve included the company’s name and market cap.

Twitter, $11 billion

Pandora, $3 billion

Yelp, $2 billion

Zinga, $2 billion

Zillow, $6 billion

Netflix, $42 billion

LinkedIn, $18 billion

Priceline, $68 billion

Match, $3 billion

TripAdvisor, $10 billion

Expedia, $16 billion

EA, $23 billion

ATVI, $30 billion

NetEase, $23 billion

Baidu, $57 billion

Yandex, $8 billion

That’s about $322 billion in valuation right there. Throw in the biggest App Revolution stock of them all and one I’ve owned since the low $20s, when I was pounding the table on this name here:

Facebook, $338 billion market cap.

At their peak, these above stocks were worth more than a trillion dollars and presently they now worth more than 2/3 of a trillion in market valuation.

Now let’s add in some of the biggest “unicorns” out there and the valuations they recently raised money at:

AirBnB, $25 billion

Uber, $60 billion

SnapChat, $20 billion

Slack, $4 billion

Didi Kuaidi, $16 billion

FlipCart, $15 billion

Pinterest, $11 billion

There’s another $150 billion in valuation for just unicorns.

Meanwhile there are thousands of smaller, privately held App Revolution companies that are worth millions of dollars each, so let’s call that another $50-100 billion there. I like to call Under Armour a stealth App Revolution play since they spent a 1/4 of a billion dollars buying just three privately app companies.

I’ve owned Amazon for many years and have highlighted here as a great App Revolution play as most people now shop on the Amazon app and not the website. Amazon’s valuation of $340 billion right now puts our total well over the $1 trillion mark.

Of course, if you add the two other stocks I’ve said were the purest and safest ways to invest in the App Revolution — Google and Apple, we’re talking about another trillion dollars right there, putting us well into the $2-3 trillion in market valuation for the App Revolution stocks I’ve highlighted over the years.

And guess what. The App Revolution is far from over. Wearables need apps to run. Artificial Intelligence, including Amazon Echo, are essentially apps. You use apps to control your self-driving cars and drones.

What are the best ways to invest in the App Revolution now? The best and safest way to invest in the App Revolution is still Google and Apple. Facebook apps accounted for 62% of all apps downloaded last month, and Facebook remains one of my largest positions as it has been since I wrote about loading up on Facebook common stock and long-dated call options back in 2012. Netflix has become a de facto standard for watching TV and movies over an app and it’s a great company. Expensive though. Baidu remains my single favorite way to invest in China, though I don’t own it personally as I don’t actually have to invest in China. I recently started buying some Twitter (remember when I panned Twitter’s horrible IPO and compared it to what I called a the best IPO in history, Facebook?). EA and its sports franchises have a large moat since building a new NBA-game would cost billions from scratch.

There are new app companies being created every day and some of them are on their way to becoming billion dollar companies in their own right and we’ll have to keep an eye out for the next great App Revolution stocks, just like we have done so far. The App Revolution lives.