$1,000 may not seem like much, but that's enough to make a difference in the stock market.
That amount of money invested in the right stock could grow to 10 times its original value. Even if you just get the S&P 500 historical average return of 9%, that would be enough to grow to more than $2,000 after 10 years and more than $5,000 after 20 years, showing the power of compounding.
If you've got $1,000 to invest, keep reading to see two stocks that look like great candidates to buy now.
Image source: Getty Images.
1. The Trade Desk
The Trade Desk (TTD 1.67%) has been a leader in the adtech industry since its early days, as it's the most popular demand-side platform (DSP) in the industry. It provides a cloud-based self-serve platform that allows brands to manage and optimize their ad campaigns.
In a difficult environment in the digital advertising industry, The Trade Desk continues to deliver strong results. The company posted revenue growth of 23% to $464 million, and its margins improved from a year ago, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improving from 37% to 39%. Adjusted net income rose 40% to $139 million, and the company posted a profit on a generally accepted accounting principles (GAAP) basis.
The Trade Desk has an impressive track record of customer retention, achieving nine consecutive years with at least a 95% retention rate. It's established itself as the platform that's likely to replace third-party cookies, which Google plans to eliminate on Chrome next year.
Its ad-targeting protocol is called Unified ID 2.0 (UID2), and many of the country's biggest advertisers have signed on to use it, including Disney and Procter & Gamble. In the second-quarter report, the company said that Warner Bros. Discovery said it would integrate with UID2, including its streaming platforms Max and Discovery+.
The company has also been investing in Connected TV, which is poised to be a major growth market in advertising. Nearly every streaming service, including Netflix and Disney+, has now introduced an ad-based tier, and even Amazon is reportedly considering it.
The Trade Desk has a long track record of outperforming the market, up more than 2,000% since its 2016 IPO, and it looks well positioned to continue to beat the market, given its strong growth in a difficult environment.
2. Carnival
Travel has been one of the biggest bright spots in the consumer sector this year. That's made a winner out of Carnival (CCL -0.66%), the world's biggest cruise line, whose shares have more than doubled year to date.
Across the travel sector, cruises look particularly strong. Disney just reported 98% occupancy of its five cruise ships for the current quarter. Carnival itself reported record demand and record bookings in its most recent earnings report in June, a sign that "revenge spending" remains strong in the cruise industry after sailings were put on pause during the pandemic.
There's more recent evidence that demand for Carnival's cruises remains strong as well. In July, Holland America reported its highest booking day in the history of the brand, noting that cruisers were booking vacations even into 2025.
The company also announced plans to retire $1.2 billion of its debts, taking another step to improve its leverage ratio after it borrowed extensively to stay afloat during the pandemic.
Despite that momentum, Carnival stock has actually pulled back since its post-earnings pop in June, with the stock now down 15% since then.
Over a longer time frame, Carnival is trading for just a fraction of its earlier peak. That makes sense, as the company had to dilute shareholders and take on debt to survive the pandemic. But with a recession now looking less likely than it has in recent months, and demand for its cruises looking strong through at least 2025, Carnival looks poised to deliver the kind of bumper profits that will help it buy back stock and pay down debt to drive the stock steadily higher.
If demand remains strong, the stock should continue to be a winner.
