These 2 Growth Stocks Have Been Hammered. Time to Buy?

Key Points

• Intuitive Surgical's underlying business keeps growing at a double-digit pace even as the stock slides in 2025.

• The Trade Desk's results are solid, but growth has cooled while investors reassess the implications of increasing competition.

• One looks buyable on weakness today, while the other may reward patience.

• 10 stocks we like better than The Trade Desk ›

When great businesses sell off, investors should lean in -- but only after checking whether the fundamentals are still doing the heavy lifting. Intuitive Surgical (NASDAQ: ISRG), the robotic-surgery leader behind the minimally invasive da Vinci system, and The Trade Desk (NASDAQ: TTD), a programmatic advertising platform for the open internet, have both been under pressure this year.

Both companies reported fresh quarterly results this summer, giving us a clear look at momentum, guidance, and what might come next. The punchline: Intuitive looks like a buy on weakness, while The Trade Desk could require more patience.

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Intuitive's momentum looks intact

Intuitive's second-quarter update was impressive. Revenue rose 21% year over year to roughly $2.4 billion, da Vinci procedures climbed about 17%, and the company placed 395 systems as its installed base grew 14% to more than 10,000. Management also secured new regulatory milestones for da Vinci 5 in Europe and Japan, widening the runway for future placements.

Guidance shows there's likely more strong growth ahead. For the full year, Intuitive expects worldwide procedure growth of about 15.5% to 17%. The company does see gross margin compression to a non-GAAP range of 66% to 67% this year, reflecting roughly a 1 percentage-point tariff headwind, but operating expense growth is slated for a manageable 10% to 14%. Overall, the company is easily handling tariffs and costs while growing at a robust pace.

The stock, however, has retreated. Shares recently traded about 29% below their 52-week high even as business trends remain constructive. For long-term investors, that disconnect is notable.

The Trade Desk sees slowing growth and has challenges ahead

The Trade Desk posted a respectable Q2 with revenue increasing 19% year over year to $694 million, customer retention staying above 95%, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reaching $271 million. The Trade Desk CEO Jeff Green highlighted ongoing platform innovation with its artificial intelligence (AI)-infused Kokai platform, as well as traction across connected TV, retail media, and supply chain tools like OpenPath. For Q3, the company guided to at least $717 million of revenue and about $277 million of adjusted EBITDA.

Context matters, though. Last year's Q3 revenue was $628 million, so the new outlook implies growth of roughly 14% year over year. Even when excluding political spend from last year's Q3 in the comparison, The Trade Desk's Q3 2025 guidance calls for just 18% growth -- a huge slowdown from the 27% growth posted in 2024's Q3. That deceleration helps explain why investors have been quick to reassess the stock's premium.

Making matters worse, Amazon recently moved in to compete with The Trade Desk when it comes to buying Netflix's lucrative advertising inventory.

The stock's beating on Wall Street suggests that many investors are worried about the company's prospects. After joining the S&P 500 this summer, The Trade Desk's shares tumbled and are now down more than 60% year to date, making it one of 2025's most bruised large caps. The decline reflects not only a higher bar on valuation but also investor worries about the open internet losing share to walled-garden platforms.

Bringing it together for investors

These are both high-quality franchises with long runways. That's why they both command high valuations. Intuitive Surgical trades at a price-to-earnings (P/E) multiple of 61, and The Trade Desk's P/E is 53. Intuitive benefits from a growing installed base, rising procedure volumes, and an expanding global footprint for da Vinci 5. In addition, it dominates the competition. While tariffs are pressuring gross margin this year, the company's underlying demand trends and scale advantages remain intact. The stock's pullback relative to that backdrop makes Intuitive a good option for investors looking to buy a category leader at a more reasonable price after a rough stretch.

The Trade Desk is different. The company continues to execute and innovate, but growth is slowing from last year's pace; guidance suggests mid-teens growth in the seasonally smaller Q3, and the competitive landscape continues to evolve. That combination might not be a great risk-reward trade-off until growth reaccelerates or valuation resets further.

In plain terms, one looks like a buy-the-dip candidate today, and one looks like a stock for your watchlist to consider buying at even lower prices. Intuitive's resilient fundamentals and still-healthy growth argue for adding shares on weakness. The Trade Desk may reward patience. Consider waiting for either faster revenue growth or a better entry point before buying.

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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Intuitive Surgical, Netflix, and The Trade Desk. The Motley Fool has a disclosure policy.