We recently published a list of the 30 Stocks That Should Double in 3 Years. In this article, we are going to take a look at where The Trade Desk, Inc. (NASDAQ:TTD) stands against other stocks that should double in 3 years.
On April 25, Kari Firestone, Aureus Asset Management executive chairman and co-founder, joined CNBC’s ‘Squawk Box’ to discuss the latest market trends and express how this is a reasonable place for long-term investors to enter the market. Despite persistent concerns about a recession coming from tariffs, Firestone thinks that corporate earnings have generally exceeded expectations. The strong performance of major tech companies has been a key driver behind the market’s recent gains, such as those in the MAG7. Elaborating on the significance of these tech giants, Firestone also underscored that the top 2 companies in the S&P 500, regardless of which they are, match the market value of the bottom 300 companies in the index. This concentration means that these leading firms are fundamental to the US economy’s progress.
The conversation then addressed the impact of proposed FDA budget cuts on innovation for biotech companies. Firestone agreed that such cuts could slow down the approval process for new products and drug manufacturing, and she advised against reducing the FDA’s budget. However, she believes that the market has already priced in these risks. She compared the situation to previous market overreactions, such as the 32% drop during the early COVID-19 period, which was followed by a rapid recovery.
Firestone also concluded that the market is now fairly valued. Some sectors offer attractive opportunities due to recent price declines. She assessed the overall market valuation in light of tariff uncertainties and the recent rebound from a 20% drop to a current decline of about 10.5%. She explained that the market’s price-to-earnings multiple has decreased from 22.5x next year’s earnings to 18.5x, assuming no severe recession. She’s confident that the market is unlikely to end the year lower than current levels and recommends that long-term investors enter the market at this stage. Firestone believes that the market has partially priced in the impact of tariffs. She estimated that a 5% to 10% tariff is reflected in current prices. While a full-blown recession may not be entirely priced in, a slowdown likely is.
Our Methodology
We sifted through financial media reports and Reddit threads to compile a list of the top 30 stocks that should double in 3 years. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A large array of computer screens and tech equipment representing the technology company’s self-service cloud-based platform.
The Trade Desk, Inc. (NASDAQ:TTD)
Number of Hedge Fund Holders: 63
The Trade Desk, Inc. (NASDAQ:TTD) is a technology company that offers a self-service cloud-based ad-buying platform. This allows buyers to plan, manage, optimize, and measure data-driven digital advertising campaigns across various ad formats and channels. These include video, display, audio, digital-out-of-home, native, and social.
Trade Desk currently manages over $12 billion in ad spend, within a $1 trillion ad industry. The company’s growth is anchored in its AI-powered advertising platform. The Kokai platform is its latest upgrade and enhances precision and value for clients, driving audience expansion. The Trade Desk, Inc. (NASDAQ:TTD) is now transitioning all clients to the Kokai platform.
The company is driving the adoption of OpenPath for a more efficient supply chain and pursuing Joint Business Plans (JBPs) with major brands and agencies, which outpace its general growth by 50%. In Q4 2024, Trade Desk’s revenue was up 22% year-over-year, with Q1 2025 revenue growth forecasts around 17%. However, on March 18, Justin Patterson, an analyst at KeyBanc, lowered the price target on the stock to $74 from $130 while keeping his Overweight rating.
Rowan Street Capital highlighted the company’s strong fundamental growth and stated the following regarding The Trade Desk, Inc. (NASDAQ:TTD) in its Q4 2024 investor letter:
“The Trade Desk (TTD): Investment Initiated: March 2020
Internal Rate of Return (IRR): 54%
The Trade Desk has been our most successful investment to date. March 2025 will mark five years since we opportunistically initiated our position at a cost basis of $17.40 (split-adjusted). Since then, TTD has appreciated more than sevenfold, delivering an annualized return of approximately 54%.
These exceptional results far outpace the company’s strong fundamental growth, with revenues and earnings compounding at approximately 25% annually over this period (refer to the table below). The primary reason for this outsized return lies in the price at which we were able to acquire TTD during the early days of the pandemic, when market fears briefly drove it down to just 10x revenues. Today, the valuation has expanded significantly to approximately 25x revenues, amplifying our returns…” (Click here to read the full text)
Overall, TTD ranks 16th on our list of the stocks that should double in 3 years. While we acknowledge the growth potential of TTD as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TTD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.