2 No-Brainer Stocks to Buy With $2,000 Right Now

Source The Motley Fool

The market is rife with fear about tariffs and their potential impact on the broader economy. This caused many stocks to sell off. Now, though, I think it's time to take action on a few companies that are best in class and have great long-term outlooks.

Meta Platforms (NASDAQ: META) and The Trade Desk (NASDAQ: TTD) are the two that top this list. These two are at the top of the pile in advertising, but advertising usually doesn't fare well during economic downturns. So, if you've got $2,000 sitting around, why are they among the best places to deploy the cash?

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Advertising revenue could take a hit due to tariffs

Advertising isn't directly affected by the tariffs, but it might be hit with ripple effects. Tariffs will drive up the cost of goods for consumers, decreasing their spending power. This will decrease the overall revenue and profits generated by companies that sell goods and services. With less money coming in, companies will look to slash costs wherever possible to cushion their profit margins.

One of the first budget areas that companies normally cut in times of trouble is advertising. Furthermore, when consumers have less spending power, they're less likely to buy an advertised product. One caveat to this argument is that some companies may need to advertise more heavily because their products may be more appealing compared to brands sourced in countries, including China, that are being hit with dramatically higher tariff rates.

The economic upheaval is likely to affect advertising-centric companies like Meta Platforms and The Trade Desk, but there's one thing about ad spending: Eventually, it always comes back. So, if you can shift your outlook from the next few months to the next few years, the price you might pay today for shares of these two leaders could come to look like an absolute bargain down the road.

Meta Platforms and The Trade Desk are top players in their fields

Meta Platforms owns social media sites Facebook, Instagram, Threads, Messenger, and WhatsApp, and nearly all of its revenue comes from advertising, so it's directly in the crosshairs of a marketing spending slowdown. However, advertising on Meta provides fantastic results for the companies that buy it, which is why it is at the top of the world in advertising.

The Trade Desk operates a software platform for ad buyers that helps them place their ads in the optimal spots. That doesn't include Meta's properties, as the social media giant handles all of that in-house, but nearly every other part of the Internet is included in The Trade Desk's operating space. One of its biggest growth areas is connected TV, which is taking an increasingly larger share of people's viewing time away from linear TV. We're still in the middle phases of that transition, and The Trade Desk still has a long runway for growth as advertisers shift their marketing spending to reflect it.

After their recent sell-offs, Meta is down nearly 30% from its all-time high, while The Trade Desk is down around 60%. The Trade Desk is even further down than most stocks because it lost 30% of its value after it missed its Q4 revenue guidance due to a platform transition. This has left the stock looking like a steal.

TTD PE Ratio (Forward) Chart

TTD PE Ratio (Forward) data by YCharts

The Trade Desk trades at 30 times forward earnings, which is a much higher premium than Meta's, but its potential for growth is much larger. Meta Platforms is still fairly cheap at 21.5 times forward earnings, especially considering its dominance in its space. Meta will report its first-quarter results on April 30, but it's unlikely that anything revealed then will send the stock lower, as it appears that the worst-case-scenario fears are already baked into the stock price.

The Trade Desk reports its Q1 numbers on May 8, and investors are hoping for signs that management has been able to right the ship in the wake of Q4's disappointing results. Missing management's guidance for two quarters in a row is not a good look for a company, so it's likely that The Trade Desk's Q1 revenue guidance was rather conservative, which could set the stage for it to deliver a beat this time.

Regardless of what happens when these two report their first-quarter results, they will be fine over the long term. If you're a buy-and-hold investor who can keep that in mind, the prices these stocks are trading at today look like great bargains, and investors should take the opportunity to scoop them up.

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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. Keithen Drury has positions in Meta Platforms and The Trade Desk. The Motley Fool has positions in and recommends Meta Platforms and The Trade Desk. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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