Finance
2 Top Growth Stocks to Buy Now and Hold for the Bull Market
The Nasdaq Composite (NASDAQINDEX: ^IXIC) has been in a bull market for 16 months and the index is already up 53%, but history says it could rise much higher in the coming years. The Nasdaq averaged 215% during the eight bull markets since 1990and it achieved these gains over an average of 40 months.
If the current bull market is in line with that average, the Nasdaq will gain another 162% over the next two years. That implies an annual return above 60%, which is very unlikely given the economic uncertainty. But no matter which way the wind blows in the short term, history shows that the index will go much higher in the long term. The Nasdaq has returned 15% annually over the past decade and similar results are likely in the next decade.
Investors looking to capitalize on that momentum should buy a few shares Amazon (NASDAQ: AMZN) And The Trade Bureau (NASDAQ: TTD). This is why.
1. Amazon
Amazon has a strong presence in three major markets – e-commerce, digital advertising and cloud services – and the company is gaining market share in two of them. Specifically, it accounted for 39.6% of online retail sales in the United States last year, an increase of 130 basis points (1.3 percentage points) from the previous year. It was also responsible for 7.6% of global digital ad spend, up 80 basis points. That makes Amazon the largest e-commerce company in the US and the third largest digital advertising company in the world.
Meanwhile, Amazon Web Services (AWS) accounted for 31% of cloud infrastructure and platform services revenue in the fourth quarter, down two points from the previous year. However, AWS is still the market leader, surpassing the second place Microsoft Azure with seven points, according to Synergy Research. Dominance in cloud services means AWS is ideally positioned to benefit as companies spend more on it artificial intelligence.
Amazon reported fourth-quarter financial results that beat consensus estimates on the top and bottom lines. Revenue rose 14% to $170 billion, with growth accelerating sequentially in every business segment except brick-and-mortar stores. Operating margin increased 600 basis points and GAAP net income was $1.00 per diluted share, compared to $0.03 per diluted share last year. Investors can expect similar selling momentum in the coming quarters.
In fact, Wall Street expects Amazon to grow revenue 11% annually over the next five years. This consensus estimate leaves room for gains if the company regains lost market share in cloud computing, a distinct possibility given its focus on AI product development. However, the current valuation of 3.3 times sales is reasonable even if the consensus sales forecast is correct.
As a final thought, JPMorgan Chase analysts selected Amazon as their “best idea” among internet stocks in 2024. More broadly, the stock has a consensus rating of “buy” among Wall Street analysts, and its average one-year price target of $215 per share implies a 20% upside from compared to previous years. the current price of $179 per share.
2. The Trading Desk
The Trade Desk operates the leading independent advertising technology platform for media buyers. The software helps brands and their advertising agencies plan, measure and optimize digital campaigns. The company has embedded its platform with advanced machine learning and measurement capabilities, helping media buyers spend their advertising budgets more effectively.
The Trade Desk’s independence – meaning it does not own any media content that could influence its behavior towards specific ad inventory – has helped the company build trust with media buyers, keeping customer retention above 95 for the past decade. % it came out. Its independence and size have also led to partnerships with publishers (media sellers) in ways that would be impossible for competitors like these Alphabet‘s Google.
The Trade Desk, for example, provides the underlying technology that ensures this Walmart‘s ad tech platform, a task that would never be entrusted to a rival publisher like Google. The Trade Desk also collects data from many more of the world’s largest retailers, including Goal, AlbertsonsAnd Wal vegetables, but these publishers are less likely to share information with competitors like Google. The result is that The Trade Desk has access to robust data that not only gives the platform unique measurement capabilities, but also theoretically gives the company an edge in training the machine learning models that inform decision-making.
The Trade Desk reported solid financial results in the fourth quarter. Revenue rose 23% to $606 million and GAAP net income rose 36% to $0.19 per diluted share. During the earnings call, Jeff Green said The Trade Desk has gained market share for eight straight quarters, and he expects the company to continue gaining market share. Management also indicated that revenue growth would accelerate to 25% in the first quarter.
Looking ahead, The Trade Desk is well positioned to maintain that momentum thanks to its strong presence in connected TV advertising and retail media, two of the fastest-growing channels in the broader digital advertising market. Wall Street expects the company to achieve annual revenue growth of 20% over the next five years. In that context, the current valuation of 20.8 times sales is acceptable, especially if the three-year average is 24.9 times sales. But investors should start with a small position.
As a final thought, The Trade Desk stock has a consensus rating of “Buy” among Wall Street analysts, and the average one-year price target of $100 per share implies an upside of 24% from the current price of $80.50 per share .
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Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Trevor Jennevine holds positions at Amazon and The Trade Desk. The Motley Fool holds positions in and recommends Alphabet, Amazon, JPMorgan Chase, Microsoft, Target, The Trade Desk and Walmart. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has one disclosure policy.
History says the Nasdaq could rise: Two top growth stocks to buy now and hold for the bull market was originally published by The Motley Fool
