It's officially a new bull market, and while artificial intelligence (AI) stocks have emerged as the biggest winners, there are other sectors that look primed to deliver significant gains as well.
With interest rates expected to fall, the U.S. economy looking resilient, and the consumer continuing to spend, now is a great time to invest. Keep reading to see two stocks that could turn $100,000 into $500,000 over time.
Image source: Getty Images.
1. Perion Network
As a small-cap stock, Perion Network (PERI 0.76%) isn't a household name among investors, but it's worth getting to know this adtech stock.
Perion occupies a unique space in the adtech industry. Its core product is its Intelligent HUB, a machine learning-based platform that connects ad buyers and sellers to optimize transactions and return on investment. As the business has scaled, the company has added a number of new products, including a cookieless tracking solution, called SORT, and premium ad features in connected TV (CTV) and retail media like a scannable QR code on CTV ads and live contextual ads that can run during games and other live events. The company also recently introduced an audio AI technology, WAVE, that can create customizable ads for radio and podcasts.
Perion aims to grow both organically and through acquisitions, and it recently acquired Hivestack, a digital out-of-home adtech company, tapping into the fast-growing corner of the ad market. The company plans to do more acquisitions to gain scale and enter new parts of the industry.
Meanwhile, the company continues to deliver solid growth with revenue up 12% in the fourth quarter to $234.2 million, while adjusted earnings per share rose $1.04. Perion saw strong growth in retail media, where revenue was up 114% to $49.7 million thanks to its premium ad products.
Finally, the stock trades at a price-to-earnings (P/E) ratio of just 9.6, which seems like a dirt-cheap price to pay for this growth stock. With a valuation that low and the potential for breakout growth, Perion has the potential to grow by 10 times over the next decade.
2. The Trade Desk
Another promising adtech stock to help you build a nest egg of $500,000 over time is The Trade Desk (TTD 1.67%). The Trade Desk is the leading independent demand-side platform (DSP). It offers a cloud-based, self-serve platform that brands and ad agencies use to manage their ad campaigns.
The Trade Desk has a long track record of outperforming the market and has been the trendsetter in its industry with technologies like Unified ID 2.0 (UID2), a popular cookieless tracking technology that some of the biggest advertisers, like Disney and Procter & Gamble, have adopted. Additionally, the company has invested significantly in artificial intelligence to develop its Kokai platform, which is expected to be released to most customers this year.
The Trade Desk has also delivered solid growth during a challenging time in the digital-advertising industry, showing the company was able to gain market share even as advertisers pulled back on spending.
In the fourth quarter, revenue rose 23% to $1.95 billion, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved from $245 million to $284 million. The Trade Desk also has a history of satisfying its customers, as it's reported a customer retention rate of 95% in every quarter of its last nine years.
With market-leading positions and technologies, strong business fundamentals, and its technological advantage, The Trade Desk looks like a great stock for long-term wealth building.
Like Perion Network, The Trade Desk also has the potential to deliver multibagger returns over the coming years, especially as it's likely to benefit from a recovery in the ad market.
