Market Correction Impacts Nasdaq Stocks - Potential Upside Ahead

Market correction has affected Nasdaq stocks, raising investor concern. The Trade Desk and Datadog show potential upside despite recent declines, suggesting resilience in the current market. Investors may find buying opportunities amidst the uncertainty.

Date: 19-03-2025

AI Rating: 6

Market Overview
The Nasdaq Composite has entered a market correction, closing over 10% below its recent high, creating an air of uncertainty in the market. The impact of U.S. trade policies and Consumer sentiment hitting a low have contributed to investor anxiety, raising recession fears.

The Trade Desk Analysis
The Trade Desk's stock has plummeted 60% from its December high due to both market weakness and disappointing financial results. Despite this decline, Wall Street analysts project a median target price of $112 per share, indicating significant implied upside of 100% from the current price of $56.
The Trade Desk reported a 22% increase in revenue to $741 million, though the figure fell short of the guided $756 million. This was the first revenue miss in 33 quarters, raising red flags. However, non-GAAP net income rose 44% to $0.59 per diluted share, ahead of analyst expectations. The expectation for earnings growth is at 14% annually through 2026, suggesting a potential recovery.
Thus, the rating for The Trade Desk would be: Revenue Growth (6), EPS (7).

Datadog Analysis
Datadog's stock is down 39% since December, signifying its vulnerability in the broader market correction. Despite mixed guidance, the median target on Wall Street remains at $160 per share, indicating a 55% upside potential from the current price of $103. The company reported a 25% increase in revenue to $738 million. However, earnings grew only 11% to $0.49 per diluted share due to increased headcount, which management believes will support revenue growth in the long term. Analysts anticipate a revenue growth rate of 19% in 2025, below the previous forecast of 21%. The ratings would be: Revenue Growth (6), EPS (6).

Overall, while both companies exhibit some weaknesses, their upside potential, alongside a historical tendency for Nasdaq stocks to recover from corrections, suggests there may still be opportunities for patient investors.

Stocks: TTD DDOG