The Nasdaq Composite (NASDAQINDEX: ^IXIC) entered market correction territory on March 6, meaning it closed more than 10% below its recent bull-market high. The index has continued to fall since then and currently trades 12% below the record high it reached in December.
One reason for that drawdown is uncertainty surrounding the economic impact of U.S. trade policy. The Trump administration has imposed sweeping tariffs on goods imported from several countries. Meanwhile, consumer sentiment has plummeted to its lowest level in more than two years and recession fears have resurfaced.
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However, there is a silver lining in the historical resilience of the U.S. stock market. The Nasdaq has recovered from every past correction, and there is no reason this one should be different. That means patient investors should treat the drawdown as buying opportunity.
Here are two beaten-down Nasdaq stocks that most Wall Street analysts expect to soar in the coming months.
The Trade Desk: 100% implied upside
The Trade Desk (NASDAQ: TTD) stock has declined 60% from the record high it reached in early December amid weakness in the broader market, though disappointing financial results also contributed. However, the median target price on Wall Street is still $112 per share. That implies 100% upside from its current share price of $56.
The Trade Desk provides ad tech software called a demand-side platform (DSP). It uses artificial intelligence (AI) to help ad agencies and brands automate, measure, and optimize data-driven campaigns across digital channels. Frost & Sullivan ranked The Trade Desk as the best DSP on the market in its latest report on the industry, scoring it above all competitors in terms of growth and innovation.
Importantly, The Trade Desk is the largest independent DSP, meaning it does not own advertising inventory. That eliminates the conflict of interest inherent to competitors. Specifically, The Trade Desk has no reason to push media buyers toward specific web content, but Alphabet has a clear incentive to prioritize ad inventory on Google Search and YouTube.
The Trade Desk reported mixed fourth-quarter financial results. Revenue increased 22% to $741 million, but management had guided for $756 million. That was the first time the company missed its own revenue forecast in 33 quarters. However, non-GAAP net income still rose 44% to $0.59 per diluted share, ahead of what analysts anticipated.
CEO Jeff Green attributed the revenue shortfall to a “series of small execution missteps.” He detailed changes on the fourth-quarterearnings callthe company has made to fix the issues, including a reorganization to streamline reporting, engaging directly with brands rather than working only with ad agencies, and adding more AI features to the platform.
Wall Street expects The Trade Desk’s earnings to grow at 14% annually through 2026. That makes the current valuation of 33 times earnings look reasonable. But I think analysts are too pessimistic. The Trade Desk beat the consensus estimate by an average of 8% in the last six quarters, and ad tech spending is forecast to grow at 22% annually through 2030.
For that reason, I think The Trade Desk will continue to beat Wall Street’s forecasts in the coming quarters. Investors with a time horizon of three to five years should feel comfortable buying a small position in this stock today.
Image source: Getty Images.
Datadog: 55% implied upside
Shares of Datadog (NASDAQ: DDOG) have fallen 39% from the record high reached in December amid the broader market correction. Worrisome guidance contributed heavily to that drawdown. But the median target price on Wall Street is still $160 per share. That implies 55% upside from the current share price of $103.
Datadog provides observability software. Its platform brings together dozens of software products that let businesses monitor IT infrastructure and resolve performance problems. Consultancy Gartner recently ranked Datadog as a leader in digital experience monitoring and observability solutions. And Forrester Research has named the company a leader in artificial intelligence for IT operations.
Datadog reported strong fourth-quarter financial results. Total customers increase 9% to 30,000 and revenue retention approached 120% as existing customers adopted more products. Revenue rose 25% to $738 million and non-GAAP earnings rose 11% to $0.49 per diluted share. The top line outpaced the bottom line because of headcount expansion. But hiring will have an uplifting impact on revenue growth within two years, according to management.
Datadog gave disappointing guidance. Revenue is expected to increase 19% in 2025, but analysts anticipated 21% growth. The stock fell sharply following the report as Wall Street reset its expectations, but that creates an opportunity for patient investors. Datadog should benefit as trends like cloud computing and AI create demand for observability software.
Importantly, the company will keep hiring throughout 2025. That has already and will continue to supress earnings growth, so it makes sense to consider the price-to-sales ratio in this situation. Shares currently trade at 14 times sales, a discount to the two-year average of 18 times sales. Investors with a time horizon of three to five years should feel comfortable buying the stock at its current price.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Trevor Jennewine has positions in The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Datadog, and The Trade Desk. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.