Artificial intelligence (AI) has been one of the biggest themes on Wall Street for several quarters. Stocks like Nvidia made many fortunes for investors, thanks to the booming demand for AI-related applications and hardware.
As we flip the calendar from 2024 to 2025, what are the AI stocks to watch? Here’s a look at two of my favorites.
The Trade Desk (NASDAQ: TTD) saw a solid year in 2024, as its shares advanced more than 60%. Driving that impressive performance were equally impressive financials. In its most recent quarter (the three months ending on Sept. 30, 2024), The Trade Desk reported 27% year-over-year revenue growth. Moreover, the company’s net income in the most recent quarter ($94 million) more than doubled from one year earlier ($39 million).
Much of the company’s success can be credited to the growth of the connected TV (CTV) ad market. The Trade Desk runs a programmatic advertising platform that helps customers buy and sell ad space on digital platforms.
For example, a digital publisher or streaming service may have ad space it would like to sell. By using The Trade Desk’s platform, advertisers can buy ad space on certain programs targeting particular demographics.
As Jeff Green, The Trade Desk co-founder and CEO, put it:
As we … look ahead to 2025, we have never been in a better position to capture greater share of the $1 trillion advertising [total addressable market]. 2024 has been a banner year for CTV. Many of the largest media companies are now working with us to help clients capture the full value of CTV advertising via programmatic [advertising].”
In short, The Trade Desk is riding an unstoppable wave. As legacy forms of media (like newspapers, radio, and cable tv) continue to give way to digital media platforms like video and audio streaming, podcasts, and online news, The Trade Desk is building the tools that will connect advertisers with these new platforms, and those tools utilize AI. For example, The Trade Desk’s Kokai platform relies on AI-powered tools to help marketers perfect their bidding, scoring, and measurement of advertising campaigns.
The Trade Desk is a company positioned to capitalize on two key trends. First, it’s a major player in the digital ad market, helping to connect buyers and sellers as the overall market rapidly expands. Second, the company’s AI-powered tools help buyers and sellers connect the right ads to the right audience.
Investors looking for an AI stock in 2025 and beyond should consider The Trade Desk.
Someone could be forgiven for thinking of Tesla (NASDAQ: TSLA) as an automobile company. After all, the company is best known for its vehicles. Yet if you want to understand why Tesla now sports a market cap of well over $1 trillion, you must learn to see it as an AI company that makes vehicles — not as a vehicle company that dabbles in AI.
