The state of the stock market is tough to pinpoint currently. It's as if investors are holding their breath while waiting for a recession that most agree is coming. The Federal Reserve is purposely slowing the economy by raising interest rates to curb inflation. Rising rates and the recession threat caused many stocks to sell off. But with inflation falling, as shown below, there is light at the end of the tunnel.

US Consumer Price Index YoY Chart

US Consumer Price Index YoY data by YCharts

The market uncertainty is an opportunity for long-term investors to accumulate terrific companies facing short-term challenges while the stocks are on sale. The Trade Desk (TTD -1.06%)Airbnb (ABNB 0.29%), and Amazon (AMZN -3.06%) are 14%, 25%, and 27% off 52-week highs, respectively. And each has compelling reasons for optimism.

Secular growth meets pristine financials

The Trade Desk is at the forefront of a changing advertising industry. These days effective advertising campaigns should be "omnichannel" -- that is, encompassing multiple mediums like connected television (CTV), website and mobile display, online video, and others.

The Trade Desk's online platform allows advertisers to run these campaigns by choosing from countless omnichannel placement opportunities. Then the platform adds value through first-party data and performance metrics. With ad budgets tightening, companies are laser-focused on efficiency, a key goal of The Trade Desk's product.

Video and CTV (television accessed over the internet, like Sling or Netflix) are The Trade Desk's bread and butter, with 40% of sales coming from these streams. CTV advertising has a long growth runway based on demographics. People 55 and older still prefer traditional television, but the younger audiences use streaming far more than traditional TV, according to The Trade Desk and YouGov. Advertising budgets will need to continue to evolve toward CTV as well.

The Trade Desk's financial performance is excellent across the board. On the balance sheet, the company has no long-term debt, $1.4 billion in cash and investments, and current assets outweigh current liabilities by nearly 2 to 1. On the income and cash-flow side, sales have risen from $661 million in 2019 to $1.6 billion in 2022, while cash from operations is up from $60 million to $549 million over this time. The impressive rise is shown below.

TTD Revenue (Annual) Chart

TTD Revenue (Annual) data by YCharts

The Trade Desk stock isn't cheap, but has fallen back to its pre-pandemic price-to-sales (P/S) valuation. With first-quarter earnings coming up on May 10 and given the challenging market, interested investors should accumulate shares slowly over time to mitigate risk. 

Airbnb is thriving

The pandemic was a tremendous shock to the travel industry and Airbnb's results. Sales fell 30%, and its operating loss ballooned to $4.6 billion in 2020.

What a difference a couple of years make. Sales came in at $8.4 billion in 2022 on 40% year-over-year growth and 75% over 2019. The company posted its first net profit of $1.9 billion. How did it do it? By making more with less.

You have probably heard about the tech sector layoffs at Amazon, Alphabet, and many others. Profit margins are hurting, and companies needed to trim some staff accumulated while the pandemic stimulus was flowing. Not Airbnb. The company was forced to downsize significantly during the pandemic, which has paid off in several ways.

First, management credits a leaner workforce (staffing is still 5% below 2019 levels) with increasing the company's focus and prompting it to get more done with fewer people. It also means that while other companies are taking earnings hits due to severances and restructuring, Airbnb's margins are expanding. The operating margin for 2022 rose to 21% from 7% in 2020. This puts Airbnb in a terrific position as it grows.

Airbnb stock is 25% off its 52-week high, which could offer an enticing entry point for long-term investors. 

Amazon is down, not out

Amazon stock has been through the wringer. Inflation, logistical snags, labor costs, rock-bottom consumer sentiment, and now an economy-wide slowdown have taken a toll, and the stock is down 27% from its 52-week high and 43% from its all-time high.

The latest problem is the slowdown in sales growth for Amazon Web Services (AWS), the world's leading cloud services provider. After growing more than 30% for years, AWS sales rose just 16% in Q1.

But management isn't fazed. CEO Andy Jassy noted in his shareholder letter that the company is actively working with customers to lower their costs. This hurts Amazon's sales now but means these customers will stay with AWS. Speaking of the "long term," Jassy eluded to it 13 times (yes, I counted) in the seven-page letter. This is precisely what committed investors should want to hear. 

Amazon's Q1 results had good news, too. Total sales increased 9% to $127 billion and operating income increased from $3.7 billion to $4.8 billion year over year. Free cash flow and operating cash flow improved as well.

The stock was up significantly immediately following the report but couldn't hold the gains. This suggests that the stock just needs a real jolt of good news to break out. After all, Amazon is still the world's largest cloud provider and has a stranglehold on online retail, well over 200 million Prime subscribers, and future-focused management.

Investors don't need to lose too much sleep in a down market. Plenty of fantastic companies are holding sales. The three above are a great place to start the search.