Key Points

• The Trade Desk has been admitted to the S&P 500 index, one of just six companies to make the cut so far in 2025.

• The company is the largest independent programmatic advertising platform and a pioneer in the field.

• Despite a rare misstep late last year, Wall Street still believes the stock is a buy.

• These 10 stocks could mint the next wave of millionaires ›

The S&P 500 is well regarded as the best overall gauge of the U.S. stock market and includes the 500 leading publicly traded companies in the country. Given the breadth of businesses that make up the index, it is widely regarded as the most reliable benchmark of overall stock market performance. To be considered for entrance into the S&P 500, a company must meet the following criteria:

• Must be a U.S.-based company
• Must have a market cap of at least $20.5 billion
• Must be highly liquid
• At least 50% of its outstanding shares must be available for trading
• Must be profitable on a generally accepted accounting principles (GAAP) basis in the most recent quarter
• Must be profitable during the preceding four quarters in aggregate

The Trade Desk (NASDAQ: TTD) is the latest addition to the S&P 500, scheduled to join the benchmark on July 18. That makes it one of only six companies to make the cut thus far in 2025. Since its IPO in late 2016, The Trade Desk has easily outperformed the broader market, generating gains of 2,410% compared to just 190% for the S&P 500 (as of market close on Monday). The stock price gains have been driven higher by solid fundamentals, as its revenue has soared 1,930% and net income has jumped 567%.

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Despite the stock's impressive rise and the programmatic advertiser's strong track record of growth, many believe the best days are still ahead for The Trade Desk. Let's take a look at the opportunity ahead and why Wall Street believes the stock is still a buy, despite sporting something of a premium valuation.

Image source: Getty Images.

A changing landscape

There's a paradigm shift taking place in the world of advertising, and The Trade Desk gets much of the credit. The company has built the world's largest independent platform for ad buyers, thanks to the vision of CEO Jeff Green. In 2003, the chief executive founded the world's first online advertising exchange, AdECN, which was acquired by Microsoft in 2007. Taking what he learned, he set out to revolutionize programmatic advertising, co-founding The Trade Desk in 2009.

The company takes a different approach to digital advertising, partnering with the major ad agencies rather than competing against them. The Trade Desk also has a long track record of innovation. The company's Unified ID (UID) 2.0 is the industry standard and heir apparent to cookies -- those annoying bits of computer code that track users across the internet. UID uses encrypted consumer data to target and measure the success of ad campaigns, ensuring that advertisers succeed without sacrificing the security of user data.

The Trade Desk recently introduced Kokai, its state-of-the-art platform, which "brings the full power of AI to digital marketing," according to the company. Kokai can review 13 million advertising impressions every second, which ensures advertisers reach the right audience with the right ad at the best time.

For full disclosure, The Trade Desk suffered a rare misstep in Q4 of last year, missing its own guidance for the first time in 33 quarters as it worked to transition customers to Kokai. Since then, however, the company has done an amazing about-face, quickly righting the ship and reaccelerating its growth.

The numbers paint a picture

Don't take my word for it. The Trade Desk's recent results are compelling. In the first quarter, revenue of $616 million grew 25% year over year, resulting in adjusted earnings per share of $0.10, rising 27%.

The Trade Desk has been consistently profitable since 2013 and has a rock-solid balance sheet, with more than $1.74 billion in cash and marketable securities -- and no debt.

Providing advertisers with an alternative to walled gardens like Meta Platforms and Alphabet's Google makes The Trade Desk an attractive choice and has helped the company maintain its long track record of growth and helped usher in its admittance to the S&P 500.

Wall Street is bullish

Despite The Trade Desk's rare misstep late last year, Wall Street remains bullish. Of the 40 analysts that offered an opinion so far in July, 27 rate it a buy or strong buy and none recommend selling.

Analysts at Susquehanna are among the most bullish, maintaining a buy rating and $135 price target on the stock, representing potential gains of 79% for investors compared to the stock's closing price on Monday. The analysts point to the company's "spectacular" track record of growth and near "flawless" execution, believing the issues that cropped up late last year have been resolved.

The Trade Desk is currently selling for just 34 times next year's earnings, and 11 times next year's sales. While that's certainly a premium, I'd argue it's a reasonable price to pay given its strong history of growth.

Furthermore, the most commonly used valuation metrics tend to struggle measuring high-growth companies, and The Trade Desk certainly qualifies. When measured using the more appropriate price/earnings to growth (PEG) ratio, the multiple clocks in at 0.87, when any number less than 1 is the standard for an undervalued stock.

Given its long track record of success, technological edge, and the support of Wall Street, I would submit that The Trade Desk is a buy.

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• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $425,505!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,604!*
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*Stock Advisor returns as of July 14, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Danny Vena has positions in Alphabet, Meta Platforms, Microsoft, and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Microsoft, and The Trade Desk. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• The Trade Desk is a leader in the digital advertising field.

• It boasts a long track record of growth.

• The stock will be joining the S&P 500 index on Friday.

• These 10 stocks could mint the next wave of millionaires ›

Shares of The Trade Desk (NASDAQ: TTD) charged higher by as much as 14% on Tuesday morning. As of 11:45 a.m. ET, the stock was still up by 9.6%.

The catalyst that sent the digital advertising stock surging was the announcement that the company would be joining one of the premier stock market indexes.

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Image source: Getty Images.

Meet the newest member of the S&P 500

After the market closed on Monday, S&P Global revealed that The Trade Desk would be joining the S&P 500. The stock will be replacing ANSYS before the market opens on Friday. In the press release that provided details of the reshuffling, S&P Global noted, "S&P constituent Synopsys will acquire ANSYS in a deal expected to be complete on July 17."

Stocks often rise when they initially join a benchmark index because mutual funds and exchange-traded funds based on that index must buy shares of the new component to keep their holdings aligned with it.

Should investors buy The Trade Desk now?

In isolation, the fact that The Trade Desk is joining the S&P 500 is no reason to buy the stock, but there are plenty of other reasons to be bullish about the programmatic advertising leader.

The Trade Desk has a long track record of innovation, as evidenced by the release of Kokai, a platform infused with artificial intelligence (AI) designed to facilitate digital ad buying. That system can access more than 13 million ad impressions each second, providing actionable insights for advertisers within milliseconds.

A rare misstep in transitioning customers to Kokai in the fourth quarter of 2024 caused the company to miss its guidance for the first time in 33 quarters, which sent the stock careening lower. However, the company has since returned to form, generating robust growth in 2025's first quarter.

Trading at 34 times next year's expected earnings, The Trade Desk is significantly discounted relative to its average multiple of 46 over the past three years.

Its ascension to the S&P 500 only solidifies the opportunity, as evidenced by its long track record of growth, industry-leading technology, and discounted price tag. That's why The Trade Desk is a buy.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $425,505!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,604!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $680,559!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of July 14, 2025

Danny Vena has positions in The Trade Desk. The Motley Fool has positions in and recommends Synopsys and The Trade Desk. The Motley Fool recommends Ansys. The Motley Fool has a disclosure policy.

Key Points

• The Trade Desk stock was crushed on its first earnings miss in eight years.

• However, the market opportunity is massive and continues to grow.

• The Trade Desk is undervalued historically, and its results are excellent.

Streaming viewership surpassed the combined total of broadcast and cable viewership for the first time ever in May 2025. This is a years-long trend that has seen streaming viewership catapult 71% over the past four years -- even as broadcast and cable viewership dropped 21% and 39%, respectively.

Investors should be asking themselves which companies are likely to benefit significantly from the shift of broadcast and cable viewers to streaming services. The Trade Desk (NASDAQ: TTD) is one of them, and its stock is on sale.

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The Trade Desk has a tremendous future

If you're not entirely sure exactly what The Trade Desk does, here it is in a nutshell. The Trade Desk software is a Demand Side Platform, or DSP. This means that it executes programmatic advertising purchases on behalf of its clients.

It works like this: When a website, streaming service, social media platform, or other digital service has ad space to sell, it sends out a bid request. The DSP responds in real time with a bid based on preset criteria for its client's ad campaign. The ad then instantly appears. The Trade Desk adds value to its service by providing its clients with a wealth of useful data.

Image source: Getty Images.

The programmatic ad market is already massive and continues to grow rapidly. Sources estimate that 91% of digital advertising and at least 56% of total global advertising is programmatic. For perspective, global advertising spending is expected to hit $1 trillion this year.

As shown below, programmatic advertising spending is expected to reach $299 billion this year in the U.S. alone and is projected to increase to $414 billion over the next few years.

Statista.

The Trade Desk is poised to benefit greatly, and stockholders should be rewarded handsomely over the long haul.

Is The Trade Desk a buy now?

The Trade Desk stock slumped after it missed its earnings estimates for the first time in eight years in the fourth quarter of 2024; however, the sell-off is considerably overdone. The fall has caused several valuation metrics to dip well below historical averages. For instance, the company's price-to-sales ratio (a common metric to value high-growth technology companies) is 82% off its five-year average:

TTD PS Ratio data by YCharts

The ratio drops under 13 on a forward basis. The market is pricing The Trade Desk like a distressed business, but it is far from that status.

The earnings miss in Q4 2024 was disappointing. However, sales still grew 22% year over year to $741 million in the quarter and 26% for the full year, eclipsing $2.4 billion. The Trade Desk has since reported encouraging Q1 2025 results. Growth accelerated to 25%, with sales reaching $616 million year over year. Operating income nearly doubled over the prior year, going from $28.7 million to $54.5 million.

The company is also on firm financial footing, with $1.7 billion in cash and investments on hand, and current assets of $4.9 billion, compared to $2.7 billion in current liabilities. Common stock of $386 million was also repurchased during the quarter. When a company buys back its stock, the number of shares available decreases, making existing shares more valuable.

In short, The Trade Desk is growing rapidly, in great financial shape, and considerably undervalued, making it look like a great buy for investors right now.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $413,238!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $40,540!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $699,558!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of June 30, 2025

Bradley Guichard has positions in The Trade Desk. The Motley Fool has positions in and recommends The Trade Desk. The Motley Fool has a disclosure policy.

Stock prices can do irrational things from day to day, or even for a few years. But if you look at more extended periods, you'll see that the market is pretty good at sniffing out winning and losing companies. That's why The Motley Fool recommends long-term investing.

So, when a stock, say, The Trade Desk (NASDAQ: TTD), returns over 2,300% since its initial public offering in 2016, investors can feel like that company is genuinely worth looking at more closely.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

The technology company has continued to grow in a lucrative but highly competitive advertising space. Despite its long-term performance, The Trade Desk is down over 40% from its high. Is the stock still a long-term winner?

Here is whether investors should consider adding the stock to their portfolios today.

Image source: Getty Images.

An alternative to the "walled garden" dominance of big tech companies

Advertising has been around forever, and for a good reason: It works. But an age-old industry is evolving. Advertising dollars are steadily shifting from newspapers, magazines, and broadcast television to the internet, where your online footprint generates data that companies can use to target you with ads they think you'll respond to.

Google (Alphabet) and Facebook (Meta Platforms) built trillion-dollar businesses on this trend. They act as gatekeepers in internet search and social media, a $500 billion market between both segments. These companies operate walled garden ecosystems, meaning they make the rules, keep the data, and give little control to advertisers.

As big and powerful as these walled gardens are, there are other opportunities in the digital advertising market -- in connected TV, online video, websites, smartphone apps, mobile web browsers, and internet audio. That's where The Trade Desk has thrived.

Its technology platform enables companies to purchase ad space, target their ads to their ideal audience, and track the results of their ad campaigns. It also offers more transparency and control than these walled gardens, a big deal to advertisers, as evidenced by The Trade Desk's success over the years.

Why The Trade Desk could continue to grow profitably

Sustained, profitable business growth is the key ingredient for a winning long-term investment.

The Trade Desk has generated $2.57 billion in revenue over the past four quarters, converting $0.26 of every dollar into free cash flow. The company can continue to build on that. Gross ad spending on the platform was approximately $12 billion in 2024, just a fraction of an estimated $135 billion opportunity in digital media (excluding search and social apps).

Additionally, an estimated $300 billion is still spent on traditional media, which will continue to shift to digital over time. The Trade Desk's gross ad spending has grown by 24% to 25% annually from 2022 to 2024, so there aren't any signs of growth slowing down meaningfully.

TTD Revenue (TTM) data by YCharts.

The Trade Desk is currently transitioning customers to its new Kokai platform, which utilizes artificial intelligence to optimize ad spending, thereby helping drive better campaign results for customers and ultimately leading to improved monetization for The Trade Desk. That could mean higher profit margins over time.

Lastly, I don't think The Trade Desk gets enough credit for taking care of its shareholders. The company's discipline in managing stock-based compensation has limited share dilution to just 3.4% over the past five years. That's a big deal because a higher share count diminishes a stock's potential returns by spreading the company's profits across a broader shareholder base.

The recent sell-off offers investors an opportunity

Stocks with stellar long-term track records, like The Trade Desk, don't go on sale often. But that is precisely what's happened. A rare, disappointing quarter in fourth-quarter 2024 sent the stock tumbling from a valuation, as measured by enterprise value-to-revenue, that had grown increasingly hot over the past few years.

When you buy and hold a stock, you are, in a way, partnering with that company. You want to feel good about who is steering the ship. On the Q4 2024 earnings call, The Trade Desk's founder and CEO, Jeff Green, discussed 15 ways the company is capitalizing on industry growth trends. It's an encouraging glimpse into The Trade Desk's leadership.

Now, the stock is valued at a level rarely seen over the past six years.

TTD EV to Revenues data by YCharts. EV = enterprise value.

The Trade Desk seems poised to continue its ongoing trajectory of profitable growth moving forward. Its current price looks like a fantastic starting point for a fresh investment, as a lower valuation means that revenue and earnings growth will more likely reflect in the stock's returns.

Overall, it seems likely that The Trade Desk will continue to be a winning stock over the long term.

Should you invest $1,000 in The Trade Desk right now?

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*Stock Advisor returns as of June 2, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy.

The past few months have been fraught with uncertainty for investors in The Trade Desk (NASDAQ: TTD). The programmatic advertiser delivered an unbroken track record of beating its own guidance for 32 consecutive quarters as it closed out 2024. Then, to the surprise of Wall Street and Main Street alike, The Trade Desk stumbled, missing analysts' consensus estimates and its own forecast. In the wake of its disappointing quarter, the stock went into freefall and shed more than 60% of its value as fair-weather investors headed for the exits.

It isn't surprising, then, that shareholders were sitting on the edge of their seats when the company released its quarterly financial results after the market close on Thursday. Indeed, those who took a long-term view had their faith rewarded as The Trade Desk returned to form and looked to put its troubles behind it.

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Image source: Getty Images.

A stark about-face

The Trade Desk's first-quarter results went a long way in assuring investors that the company's best days are still ahead. Revenue of $616 million grew 25% year over year, accelerating from 22% growth in Q4. The results were reflected in the bottom line, with adjusted earnings per share (EPS) of $0.33, representing an increase of 27%.

To give the numbers some context, analysts' consensus estimates were calling for revenue of $575.3 million and adjusted EPS of $0.25.

Helping drive the results was the increased adoption of The Trade Desk's artificial intelligence (AI)-infused Kokai platform. The new, advanced media buying platform features enhanced decision-making and ad campaign measurement tools. Kokai can access more than 13 million advertising impressions every second, helping distill the complexity of those choices into actionable intelligence within milliseconds. The Trade Desk says the platform helps "advertisers buy the right ad impressions, at the right price, to reach the target audience, at the best time.

The company stumbled in the fourth quarter as it faced logistical issues transitioning existing customers from its legacy Solimar platform to Kokai. The Trade Desk immediately embarked on a reorganization to make the company more nimble, while better positioning it to capture emerging opportunities, including connected TV (CTV), retail media, and audio.

"We're encouraged by the early impact of the strategic upgrades at the company we implemented in Q4, which contributed to our outperformance," said co-founder and CEO Jeff Green. "As we build on this momentum, we're optimistic about our ability to continue to outpace the market and deliver increasing value to marketers who prioritize objective, transparent, and data-driven media buying on the open internet."

The Trade Desk also cited its strong customer retention, which remained above 95% during the quarter, a track record that goes back 11 consecutive years.

What the future holds

Some investors were justifiably concerned after The Trade Desk's precipitous fall from grace, but its rapid recovery bodes well for the future. Furthermore, the tone of management's commentary and its outlook suggest the best is yet to come.

For the second quarter, The Trade Desk is guiding for revenue of at least $682 million, which would represent growth of about 17% year over year. It's worth noting that management has a tendency to issue conservative guidance. Its track record (with that one notable exception) shows the results are typically higher.

The Trade Desk stock is currently selling for 34 times forward earnings. While that's something of a premium, the average multiple over the past three years has been closer to 55, so the stock is trading at a significant discount to its historical price.

Don't expect that bargain to last for long. In the wake of its blockbuster financial report, investors have bid the stock up more than 11% in after-hours trading.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $303,566!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $37,207!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $623,103!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of May 5, 2025

Danny Vena has positions in The Trade Desk. The Motley Fool has positions in and recommends The Trade Desk. The Motley Fool has a disclosure policy.

The stock market drawdown has opened up several investment opportunities, but few are more attractive than The Trade Desk (NASDAQ: TTD) right now. Some unfortunate timing hit the stock, and it has actually been hit by two sell-offs in a row, which has made the stock much cheaper than it has been in some time.

The Trade Desk's growth runway is massive, and if you don't buy shares of this top-tier company, you'll regret it years down the road.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

The Trade Desk is bigger than it was the last time it was valued at this level

The Trade Desk has been a rock-solid performer for its entire life on the public markets. It had never missed management revenue guidance but failed to meet those expectations in the fourth quarter. As a result, the stock plummeted more than 30% after it reported Q4 results on Feb. 12. That was just a few days before the S&P 500 notched its last all-time high before the stock market moved lower.

As a result, the already beaten-down stock fell even further, leading to the current point where The Trade Desk is down 65% from its all-time high. You'd have to rewind back to January 2023 to see the last time the stock traded this low, but investors need to ask themselves: Is The Trade Desk a far better company than it was in January 2023?

Part of the reason The Trade Desk missed its revenue guidance was its transition from one platform to another. The Trade Desk's primary product is a software platform that helps ad buyers (companies with a product or service to advertise) place their ads in the most optimal locations. The Trade Desk may not have access to some areas of the Internet, like Facebook or Google, but it does have reach into important areas like podcasts and connected TV.

The 100% transition from its old Solimar platform to its new Kokai platform caused some issues, which is why The Trade Desk missed revenue expectations. Over the long term, this will be a much better platform for the company and its clients because Kokai is an AI-based platform that can adjust ad campaigns based on the data that it sees instantly.

Another reason why The Trade Desk dropped was that it gave fairly mundane Q1 guidance, with revenue only expected to grow 17%. We'll find out the true growth rate when The Trade Desk reports on May 8, but I expect them to exceed this projection. After a revenue miss, management wants a guaranteed win, so "underguiding" for Q1 so it can get back on track seems like a wise move.

But even if The Trade Desk just meets expectations, the stock looks like a great value here.

The stock looks like a strong buy at these levels

After the sell-off, The Trade Desk's stock is starting to look extremely attractive, especially considering its market value at the start of 2025.

TTD PE Ratio (Forward) data by YCharts

Though 27 times forward earnings isn't cheap, it has a massive growth runway, especially as society transitions from linear to connected TV. Wall Street analysts expect 17% revenue growth in 2025 and 20% in 2026, so the stock is clearly expected to put up market-beating growth.

The market was willing to pay a sky-high premium for the stock heading into the new year, but a revenue miss and a market-wide sell-off caused the stock to plummet to lows not seen for a long time. This seems like the perfect opportunity to scoop up an industry leader for cheap and hold onto the stock for three to five years as the recovery begins.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $276,000!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $39,505!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $591,533!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.

See the 3 stocks »

*Stock Advisor returns as of April 21, 2025

Keithen Drury has positions in The Trade Desk. The Motley Fool has positions in and recommends The Trade Desk. The Motley Fool has a disclosure policy.

Although the market rebounded sharply on Wednesday on news that President Trump was pausing tariffs and only levying a flat 10% rate, except for China, the Nasdaq is still in a bear market. Bear markets start when an index drops 20% from its all-time high and technically remain in bear market status until a new all-time high is reached, which then kicks off a bull market.

Regardless of the technical definition of a bear market, there are still plenty of bargains to be scooped up right now, and I think investors should still be buying. Two near the top of my list of best buys are Amazon (NASDAQ: AMZN) and The Trade Desk (NASDAQ: TTD). Investors received a pop on Wednesday, and these are fantastic buys that should be great investments over the next three to five years.

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Amazon

While most people view Amazon as a potential casualty of the trade war with China due to the large amount of goods sourced from China on its e-commerce site, I think that's the wrong way to view the stock.

Although e-commerce is the way most people understand and interact with Amazon, it's far from the best reason to own the stock. Amazon has multiple segments, ranging from its online stores to advertising services to its cloud computing division, Amazon Web Services (AWS). It's well documented that retailers don't have huge profit margins, but ancillary segments like advertising services and AWS do. Both of these segments won't be as affected as the commerce division should the price of goods from China rise.

Amazon derives a lot of its profits from these two divisions, which is why I think right now is a great opportunity to buy the stock. Investors are worried about the segment that doesn't matter as much to Amazon's bottom line.

In 2024, AWS made up 58% of Amazon's operating profit despite only making up 17% of sales. While we don't know what operating margin its ad services posted, a 20% operating margin isn't out of the question, especially if you consider what margins an advertising-focused company (like Meta Platforms (NASDAQ: META)) puts up. If we use that 20% margin as a baseline, we can estimate that advertising brought in $11.2 billion compared to the $68.6 billion Amazon generated companywide.

Remember, that's a conservative estimate, so the actual figure is likely much higher than that.

Amazon's ad business and AWS will be fine regardless of what happens with the tariffs. With these two generating the lion's share of Amazon's operating profit, I think now is an excellent time to buy the stock.

The Trade Desk

The Trade Desk stock has been pummeled in 2025. It's down over 50% this year, partially from self-inflicted issues and partially from a marketwide sell-off. The Trade Desk is another ad company on the buy side of the ad market. It helps its clients find the most opportune spot to place their ads on the internet and has a strong foothold in an emerging space: connected TV.

This has allowed The Trade Desk to post phenomenal growth rates over its life as a public company, but it had its first slip-up on the public markets. It missed fourth-quarter revenue guidance for the first time in company history and gave a bit of a weak first-quarter outlook. This caused the stock to sell off over 30% in one day. This decline happened before the marketwide sell-off, so the pressure from that general selling drove the stock down even further. Now, it trades at a level it hasn't been at since before 2020.

TTD PS Ratio data by YCharts

Although The Trade Desk missed expectations and guidance, it's still expected to grow revenue at an 18% pace in 2025 and 20% in 2026. This makes it an excellent stock to scoop up right now, as it's one of the top bargains in the stock market.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Amazon and The Trade Desk. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy.

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1. Meta Platforms

Meta Platforms (NASDAQ: META) is coming off a year of strong growth as it continued to invest in artificial intelligence (AI) to bring more personalization to its social media platforms. The company is set for strong growth yet trades at a reasonable 24 times earnings.

Meta Platforms spends billions on technology every year to support the growth of its apps, and importantly, AI. More than 700 million monthly active users have tried its Meta AI assistant, and management expects that number to grow to 1 billion in 2025.

Meta AI is quickly scaling into one of the most used AI assistants. The growing adoption highlights the advantage the company has with more than 3.3 billion people using its services every day across Facebook, Instagram, WhatsApp, Messenger, and Threads.

This large user base drives substantial advertising revenues. Last year, Meta Platforms earned $62 billion of net income on $164 billion of revenue, with the top line growing 22%. Other than Meta AI, the company also offers professional AI tools that improve ad targeting across its family of apps, which is benefiting the business. Over the long term, Meta could discover new revenue streams from offering premium AI services that pads the company's bottom line.

Analysts expect Meta to deliver 16% annualized earnings growth in the coming years. While no one has a crystal ball for the stock in the near term, investors that buy shares today should see returns that roughly follow the underlying growth of the business from here.

2. The Trade Desk

The Trade Desk (NASDAQ: TTD) is a leading digital ad-buying platform that is benefiting from the growth in digital advertising -- a market valued at $800 billion and growing.

A small revenue miss compared to expectations last quarter sent the stock plummeting, but nothing has changed the company's competitive position or long-term opportunity, which means investors have a great opportunity to buy shares on the cheap.

Ad agencies and brands love The Trade Desk because it offers a wide range of ad inventory, and it offers the technology to make profitable ad-buying decisions. For example, its Kokai AI platform can quickly sort through millions of ad impressions every second to help advertisers find the right deal. Better pricing, targeting, and ad performance is helping The Trade Desk gain more clients.

The Trade Desk generates revenue by charging a fee of the total amount its customers spend on ads and other services. Revenue grew 26% to $2.4 billion in 2024, and the business earned a healthy profit margin of 16%.

Connected TV continues to be one of biggest opportunities, where The Trade Desk has valuable partnerships with Roku and Disney. The connected TV ad market is estimated to reach $46 billion by 2026, according to Statista, providing tremendous upside for the company.

Revenue is expected to grow 18% this year, yet the stock is trading at its lowest valuation in years. Analysts expect earnings to reach $3.89 by 2028, which makes the current share price of around $50 look like a bargain. Investors that take advantage of the sell-off are likely looking at handsome gains down the road.

Should you invest $1,000 in Meta Platforms right now?

Before you buy stock in Meta Platforms, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Meta Platforms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms, Roku, The Trade Desk, and Walt Disney. The Motley Fool has a disclosure policy.