The Best Stock to Invest $500 in Right Now

If you’ve got $500 sitting around collecting dust, there are few better options to invest in than The Trade Desk (TTD +2.96%). At first glance, you may be wondering why I think a stock down around 80% from its all-time high constitutes a good investment, but once you understand why it’s down so big, you may agree.

I think The Trade Desk is a screaming value right now, and investors should be confident in injecting new capital into this long-term winner.

Image source: Getty Images.

The Trade Desk hit a bump in the road

Despite sliding some 80% from its all-time high, the stock is still up nearly 900% over the past decade thanks to all of the company’s success. The Trade Desk has built one of the best buy-side ad technology platforms. This software helps users place their ads in the most optimal space in places like website margins, podcasts, connected TV, and pretty much anywhere else you think a digital ad could appear (outside of walled garden sites like Google, Facebook, or Instagram).

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NASDAQ: TTD

The Trade Desk

Today’s Change

(2.96%) $0.79

Current Price

$27.31

Key Data Points

Market Cap

$13B

Day’s Range

$26.20 - $27.55

52wk Range

$21.08 - $91.45

Volume

495K

Avg Vol

17M

Gross Margin

78.63%

This isn’t a business that’s expected to be disrupted by the implementation of generative artificial intelligence (AI), but it has sold off heavily alongside its software peers regardless of that fact. However, it could soon benefit from a new partner: OpenAI.

Reportedly, OpenAI was in talks with The Trade Desk regarding how to implement ads on its platform. This partnership would give The Trade Desk’s clients access to a new form of advertising that could generate massive revenue. Imagine you asked ChatGPT what the best product is to buy, and it gave some recommendations, including a sponsored one (that it informed you was sponsored), and you can go directly to the website to buy it. That would be a lucrative advertising space, and with The Trade Desk being a partner in its creation, it could result in massive growth for the company, something it desperately needs.

During the fourth quarter, The Trade Desk’s revenue growth was nothing spectacular, rising 14% year over year. However, investors were more worried about next quarter’s growth, as they only expect revenue to rise 10%. That’s a huge issue, marks a transition from becoming a growth stock. However, the value investment community hasn’t picked up on The Trade Desk’s stock quite yet, which is why the stock trades for such a cheap valuation.

TTD PE Ratio (Forward) data by YCharts

At 14 times forward earnings, The Trade Desk is a screaming bargain and is slated to rally once its growth returns. If the OpenAI partnership pans out, I won’t be surprised to see the stock skyrocket over the next few months. As another vote of confidence, The Trade Desk’s CEO just purchased nearly $150 million of stock with his own money. That shows he’s confident about the turnaround, and investors should be, too.