There’s a common saying that in China, the term ‘crisis’ is represented by two characters; ‘danger’ and ‘opportunity.’ Despite the compelling nature of this claim, it doesn’t hold up under scrutiny. Despite this, the perception persists, due to the intrinsic truth the statement holds — crises can be perilous but simultaneously provide unique opportunities. The present era of market fluctuation along with economic instability is such an example, irrespective of one’s opinion on the severity of the crisis. Several high-potential stocks have taken hits due to an overall downward trend in the market. Let’s discuss my top three picks of stocks that have experienced a drop of 20% or more providing a unique investment opportunity right now.
In a hypothetical situation, were you provided with a time machine, your money-making mission could be to buy Amazon stocks during a downturn. But no need for fantasy, because right now, Amazon shares are trading nearly 22% lower than their peak earlier this year. What is triggering this fall? It’s largely due to concerns about the adverse consequences of new tariffs. However, I venture to predict that Amazon’s operational sustainability may fare better than many anticipate.
Even if Amazon were to transfer higher tariff costs to its customers, the platform’s competetive pricing strategy still remains an attractive proposition for consumers seeking economical choices online. Yet, it’s crucial to acknowledge these steep tariff levels will not persist indefinitely. Be it successful trade negotiations, changes in policy due to inflationary pressure, legal interventions or even a change in administrative office — the uncertainty plaguing today’s economic climate will eventually peter out.
Considering this, Amazon stands poised to rebound with strength after the storm. The long-term potential of investing in Amazon hasn’t lost any of its previous luster. Even a few months back when Amazon stocks were hitting their zenith, the same growth prospects were evident. The e-commerce industry still has considerable space to spread out, more enterprises are shifting their IT expenditure to cloud services, and the wave of Artificial Intelligence (AI) continues to spur growth.
Amazon, with its robust business model, is set to capitalize on these advantageous trends. Thus, Amazon stocks remain a tempting purchase today despite the setback.
Alphabet Inc., the parent company of tech behemoth Google, has witnessed its shares tumble almost 27% from their peak earlier this year. Several contributing elements lead to this drastic slide, not limited to the overall market apprehensions. One of the gravest concerns surrounding Alphabet now is the looming threat of antitrust lawsuits. In less than 12 months, two federal courts found Google guilty of operating illicit monopolies. There were two separate incidents in question: one involving the Google Search engine itself and another concerning Google’s advertising technology platform.
Moreover, disclosures in federal court reveal that Eddy Cue, Apple’s executive, holds a viewpoint that AI-driven search engines will inevitably overshadow Google Search. But does this mean one should dismiss Alphabet’s stock without a second thought? I don’t believe so.
It is true, these antitrust verdicts can create a significant hurdle for Google. However, it’s important not to jump the gun about Alphabet’s overall performance; there is a fair chance the company will fare better than anticipated during the appeals process. I agree with Cue’s prediction that over time, AI-operated search engines could replace Google Search. But, I’d add, who better to pioneer those replacements than Google itself.
Google’s AI Overviews and AI Mode features that have already found a place within its search engine have achieved considerable success. Furthermore, it may not be prudent to rule out Google from future advancements in search and AI. Another significant opening for Alphabet lies in other AI-driven areas.
Google Cloud is amongst the fastest-growing in the realm of major cloud service providers, and Waymo, under its wing, is leading in the autonomous ride-hailing services industry. These are indicators of Alphabet’s potential important role in the rise of General Artificial Intelligence within the next few years.
The Trade Desk, the adtech firm, witnessed a disappointing dive in its share prices this year. The shares have seen a 60% decline from their high from 2024’s final quarter. Despite this significant drop, it would be ill-judged to write off The Trade Desk’s potential for revival.
The company’s setback was driven largely by its failure to meet revenue estimates in the final quarter of 2024, marking the first shortfall in the company’s expectations in its 33-quarter history as a public entity. Still, the company’s management acted responsibly, acknowledging the issue and quickly devising a turnaround strategy.
The shift from traditional to digital advertising isn’t slowing down. Expect to see more ad-supported connected TV in the future, with continued growth in the open internet ad market. The Trade Desk still offers an unmatched platform for advertisers looking to target specific consumers. If these observations play out as predicted, investing in The Trade Desk now should yield substantial dividends in the future.
Despite the current slump, it’s my belief that the Trade Desk’s situation may be more of an opportunity than a crisis for long-term investors. As it rises again, much like the phoenix from the myths, its stock could prove to be more than a worthy addition to any investment portfolio.