The Trade Desk and Lululemon Are the Only 2 S&P 500 Stocks Down 50% or More in 2025. Which Is the Better Buy Right Now?

The S&P 500 is an index that includes some of the most important businesses in the U.S., which would seemingly make them safe stocks to invest in. But every year, there are S&P 500 stocks that go down and sometimes the drops are substantial.

In 2025, this includes advertising technology (adtech) company The Trade Desk (NASDAQ: TTD) and athletic apparel business Lululemon (NASDAQ: LULU) -- the only two S&P 500 stocks that are down by 50% or more as of this writing.

Allow me to explain why both The Trade Desk stock and Lululemon stock are down in 2025. Then I'll explain which one I believe is a better buy right now.

Why The Trade Desk stock is down

The Trade Desk is a growth stock with trailing-12-month revenue up more than 220% over the last five years. But on Aug. 7, management predicted the company would generate revenue of $717 million in the upcoming third quarter of 2025, which would only represent 14% year-over-year growth -- its slowest (besides the pandemic) since going public in 2016.

When a growth stock such as The Trade Desk forecasts slower-than-usual growth, investors aren't happy. The stock is consequently down.

Adding to the disillusionment is that The Trade Desk just launched its new AI-enhanced platform Kokai, which management says is its "most significant platform upgrade to date." Investors reasonably expected this platform to jump-start growth right out of the gate.

Furthermore, some of the top advertising companies -- competitors of The Trade Desk -- are putting up impressive numbers. For example, Meta Platforms just reported a 21% increase in advertising revenue in the second quarter of 2025 compared to a 19% increase for The Trade Desk. And The Trade Desk is much smaller, which is why many investors would expect it to grow faster.

In summary, The Trade Desk launched a new platform and growth slowed, dropping below the growth rate for other advertising businesses such as Meta. This is why the stock has fallen by 55% in 2025.

Why Lululemon stock is down

The apparel space is notoriously tricky -- the line between an enduring brand and a fleeting fad is often only visible in hindsight. For Lululemon, its sales in North America are slowing considerably, with net revenue only up 1% in the second quarter of 2025 compared to the prior-year period and with comparable sales dropping by 4%.

North America is Lululemon's largest market by far. And the flatlining results make investors suspect that competition is getting more fierce and consumers are choosing to buy other brands.

Additionally, headwinds from tariffs are blowing against Lululemon's profits. In 2024, 40% of the company's products were made in Vietnam, which has seen tariffs from the U.S. increase in 2025. Management is still trying to figure out what it's going to cost. But in Q2 it estimated that tariffs would drop its gross profit by $240 million in 2025.

As a result, Lululemon isn't expecting its full-year profit to be as big as it initially anticipated. And slowing growth coupled with these lower full-year expectations has contributed to the 54% drop for Lululemon stock in 2025.

Here's the better stock to buy today

I want to preface my pick by saying that Lululemon may be the safer stock to buy today. Even with the sales-growth slump and tariff headwind, the company expects revenue to be at an all-time high in 2025. Moreover, its earnings per share are only expected to drop by about 12% this year compared to last year and they'll still be higher than they were two years ago.

In other words, Lululemon's business isn't in dire straights -- the numbers are still close to all-time highs. And the valuation is cheap with the stock trading at just 12 times earnings. This is why I think the downside is limited although it will need to return to growth for better upside down the road.

However, I believe The Trade Desk stock could be the better buy today because it could enjoy more long-term growth.

That said, the world of adtech is competitive and, thanks to AI, it's fast-changing as well. So I wouldn't necessarily call The Trade Desk stock a sure thing today. It's still possible that growth could further slow. And if it does, the stock could still have more room to drop considering it trades at a pricey 10 times sales.

However, adoption for The Trade Desk's Kokai platform may have underwhelmed, not because of its capabilities, but rather because of its lack of user-friendliness. That's according to sources for Adweek. And these sources say that the company is already making changes based on customer feedback.

Therefore, it's possible that Kokai could catalyze growth for The Trade Desk after just a brief hiccup. And if that's true, the stock could experience upside for years to come as the company enjoys tailwinds from the booming programmatic advertising space. This is why I think that The Trade Desk stock could be a better buy today compared to Lululemon stock.

Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc., Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy.