I try not to double down on the same old artificial intelligence (AI) recommendations too often. You know that Nvidia (NVDA -0.17%) dominates the AI hardware market, and that Advanced Micro Devices (AMD 9.36%) is putting up a fight. The cloud computing platforms from Amazon and Microsoft provide the infrastructure for most AI services, though Alphabet and Oracle are coming on strong. Again, that's all old news. You don't need me to come up with these ideas, all of which would make great cornerstones of a long-term AI portfolio.
So let's check out a couple of timely AI investment ideas. In my eyes, The Trade Desk (TTD 0.73%) and Lemonade (LMND -0.10%) stand out as fantastic AI investments in the middle of October 2025.
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When great companies go on clearance
The Trade Desk is the metaphorical air-traffic controller for digital ads across the open internet. Brands and agencies use its ad-tech software (a demand-side platform, or DSP) to buy ad space in real time -- on connected TV, mobile apps, streaming audio, websites, even digital billboards -- aiming each impression at the right audience, at the right moment, for the right price.
The company charges a fee on the ad sales flowing through its recommendation systems to the final ad spot. Since The Trade Desk optimizes the efficiency of every ad dollar, its services tend to keep growing even in a weak or unpredictable economy.
Now, The Trade Desk has been so consistently excellent in good times and bad that investors started setting unrealistic expectations. Heading into February's fourth-quarter report, the stock had gained an eye-popping 147% in two years. But the report fell short of Wall Street's top-line expectations, resulting in a 33% price drop the next day. The bearish market attitude continued from there, despite a return to the expected analyst-stumping results in the two reports that followed.
All told, The Trade Desk's stock trades 58% below that February peak today. It's still the leading DSP on the market, despite incoming challenges from Amazon and others, driven by AI-powered ad campaign systems.
Sure, the whole online advertising sector has been crawling since the inflation panic of 2022, and the downturn isn't over yet. But The Trade Desk can thrive even in this economy, and I can't wait to see how the business responds when advertising budgets are growing again.
Lemonade's AI focus is finally paying off
Lemonade is the AI-native insurer that turns frustrating "call and wait" experiences into a simpler "tap and go" business. It sells renters, homeowners, pet, and car coverage directly through its app, using automation to underwrite in minutes, approve simple claims in seconds, and route the thorny stuff to humans -- while leaning on reinsurance to tame expensive surprises such as hurricanes and earthquakes.
The company earns premiums (net of reinsurance) and investment income on the float (premiums held until claims are paid). Insurance is an essential service and Lemonade's automation aims to lower costs and improve loss ratios as customers age into bigger policies. The company's business can perform well through choppy economic weather with a bit of app-powered charm.
If The Trade Desk is a proven winner trading at a discount, Lemonade strikes me as a future giant on the rise as its insurance technology matures. This stock has gained 187% over the last year, thanks to an unbroken string of analyst-stumping earnings reports.
Lemonade was a market darling once, when its automated insurance processes seemed perfect for the coronavirus lockdown era. However, the stock fell hard when Lemonade posted a few underwhelming reports in 2022. That wasn't just a difficult time to run a high-growth business, but Lemonade's insurance underwriting software wasn't ready to run yet. The company needed to train its AI systems with lots of actual customer data and real claims.
Well, Lemonade's systems have learned enough to operate a robust insurance business by now. Its net loss ratio was 69% in Q2 2025, down from 90% in the same quarter of 2022. Lower ratios are better, since the metric reflects Lemonade's payout expenses in relation to the incoming premium fees. And the in-force premium (a measure of the number and size of the company's active insurance plans) more than doubled over the same period, from $458 million to $1.08 billion.
Meanwhile, Lemonade is expanding its services to more U.S. states and Western European countries. This future insurance giant is just getting started, and it's one of the fastest-growing names in the industry today.
