Some tickers were already undervalued headed into this week’s plunge. Now they’re long-term prospects that are just too good to pass up at their present prices.
It’s been a rough past four weeks for investors. All told, the Nasdaq Composite is now down 12% from its mid-February high. Plenty of stocks are doing even worse, too, in some cases adding to weakness they were already suffering prior to the market’s current rout.
The fact is, however, for true long-term investors, the Nasdaq’s steep sell-off is far more of an opportunity than a reason to panic. More to the point, savvy investors should be using this sweeping pullback to step into good growth stocks at a great discount.
With that in mind, here’s a closer look at three of the best buys in the midst of the current carnage.
The Trade Desk
Shares of advertising technology outfit The Trade Desk (TTD 2.26%) aren’t just down in step with the Nasdaq Composite’s recent correction. Thanks to this week’s stumble, this ticker’s down more than 50% from last month’s high. Its fourth-quarter revenue reported in February came up short of expectations, as did its first-quarter sales guidance. It was the first time in years the company would miss its own top-line forecast as well as analysts’ collective outlook. Investors understandably panicked. Threats of a recession kept them in panic mode in the meantime.
As is so often the case, though, the emotionally charged sell-off overshot its target by factoring in too much fear and not enough long-term reality. While the company is undeniably on the defensive because of challenging internal and external circumstances, the fact is, its response to both is an encouraging one.
Part of this revitalization plan includes December’s restructuring of its corporate hierarchy to reflect the way brands and advertising agencies now purchase programmatic ad inventory, including direct purchases from brands themselves. Its connected-television ad customers may encounter a distinctly different buying experience than its web or audio customers do, for instance. The Trade Desk is adapting to a technology-focused landscape where middlemen are becoming obsolete, by offering clear value and simplicity as a new kind of intermediary.
Perhaps the top growth opportunity that most investors just aren’t recognizing right now, however, is the looming shakeup and shakeout of the web advertising arena itself. As CEO Jeff Green commented during February’s Q4 earnings call, “We are preparing for a world where Google exits the open internet,” alluding to the regulatory pressure that Alphabet is increasingly feeling that will eventually remove it as a direct advertising-technology competitor to The Trade Desk. In the meantime, the company continues to lead the ad-supported connected-TV market that’s still growing like gangbusters.
These are all long-term tailwinds, and things could still prove tricky in the short run. With the stock trading near a 52-week low though, it’s worth any near-term volatility.
Arista Networks
Anyone keeping tabs on networking name Arista Networks (ANET 1.42%) probably already knows the stock’s been in trouble since late January. That’s when low-cost artificial intelligence (AI) platform DeepSeek was unveiled, seemingly posing a threat to the artificial intelligence industry’s demand for data center hardware. Then in February, its Q4 results highlighted how major Arista customer (and Facebook parent) Meta Platforms was buying less of Arista’s networking equipment than it had in the past. That red flag paired with lackluster guidance for the year now underway along with rekindled inflation worries sealed the bearish deal. Arista Networks shares are now down nearly 40% from their January high, with the latest leg of this sell-off being mostly driven by marketwide weakness.
Now take a step back and look at the bigger picture. It’s still far more bullish than not.
Yes, there arguably is some validity to the notion that DeepSeek — and the eventual rise of low-cost alternatives to artificial intelligence platforms that function like DeepSeek — will crimp demand for networking switches. There’s also no denying that an inflation-plagued economic slowdown will prompt companies to cut back on some of their technology spending. In that new networking hardware is nice to have but not a must-have, this company is vulnerable to such budget cuts.
The value and functionality of Arista’s tech is truly incredible though. Unlike many other switches and routers, the vast majority of Arista’s cloud and data center tech uses Arista’s Extensible Operating System — software that can be customized and regularly updated to meet the market’s ever-changing needs without requiring the purchase of new hardware.
That may not mean much to the average person, but to a data center chief who must balance cost and performance, it matters.
At its current price, newcomers will be stepping in at valuation of just over 30 times this year’s expected per-share earnings of $2.50, and a price that’s more than 50% below analysts’ consensus target of $123.79.
Marvell Technology
Finally, add Marvell Technology (MRVL 4.00%) to your list of bargain stocks worth buying thanks to the sweeping Nasdaq sell-off.
Never heard of it? It wouldn’t be terribly surprising if you haven’t. Its relatively small market cap of $57 billion doesn’t exactly turn heads these days, and the company doesn’t manufacture any high-profile products that consumers are outright clamoring for.
Its tech is still indispensable, however, to plenty of institutions that manage a cloud, operate data centers, need to store digital data, and more, but need a very specific solution to do so.
In simplest terms, Marvell Technology makes a wide range of customized high-performance silicon. This can include data center switches not unlike those offered by the aforementioned Arista. But, it also includes hard drives and the storage accelerators that makes retrieving and delivering data to these devices faster than it would typically happen. Fiberoptic connectivity and customized ASIC (application-specific integrated circuit) processor chips are in its wheelhouse as well. It obviously serves data center operators, but automobile makers and telecom service providers also rely on Marvell’s custom tech.
This ability to meet very specific but fairly small-scale technology needs hasn’t meant much to investors of late. Shares have fallen in step with the Nasdaq, and currently sit at a multimonth low that’s nearly 50% less than January’s high.
Like Arista, Marvell shares have just been hammered by a combination of factors including the advent of DeepSeek as well as inflation. Now the same recession worries that have been driving the overall market lower are taking a toll on this particular ticker.
As was the case with The Trade Desk as well as Arista Networks though, the sellers have arguably taken matters too far here. Marvell Technology’s broad diversification and its ability to offer specialized high-performance silicon that bigger manufactures just won’t — or can’t — manufacture is precisely why this company’s shareholders don’t need to be quite as worried as they are. Marvell should be able to find enough customers even in a lousy economic environment.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Arista Networks, Meta Platforms, and The Trade Desk. The Motley Fool recommends Marvell Technology. The Motley Fool has a disclosure policy.
