The Trade Desk (TTD +3.39%) and Chipotle Mexican Grill (CMG +4.09%) are among the worst-performing stocks in the S&P 500 (^GSPC +0.98%) year to date. The former is down 66%, and the latter is down 48% in 2025, but most Wall Street analysts view the stocks as oversold.
- Among 44 analysts, The Trade Desk has an average target price of $62.60 per share. That implies 56% upside from its current share price of $40.
- Among 38 analysts, Chipotle has an average target price of $43 per share. That implies 36% upside from its current share price of $31.60.
Forecasts from Wall Street suggest these stocks are no-brainer buys ahead of 2026, and both stocks are priced at less than $50 per share.
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The Trade Desk: 56% implied upside
The Trade Desk is the leading demand-side platform (DSP) for the open internet. A DSP is a type of adtech software that helps brands plan, measure, and optimize campaigns across digital channels. The open internet refers to the network of websites and applications not controlled by tech giants like Meta Platforms and Alphabet's Google, often referred to as walled gardens due to their extensive control over advertising supply chains within their own ecosystems.
The Trade Desk has an important advantage in its independence. It does not own media content or advertising inventory that could bias spending on its platform. Not only does that remove conflicts of interest inherent to Meta and Google, but it also means publishers are more likely to share data because The Trade Desk is not a competitor. Consequently, the company says it has the best campaign measurement tools on the market.
However, the stock has fallen sharply because investors are worried about intensifying competition with Amazon. The Trade Desk is the most popular DSP for the open internet, and the company dominates connected TV (CTV) advertising. But Amazon recently struck deals to access advertising inventory from Roku and Netflix, and it introduced artificial intelligence (AI) tools that could help it take share in other areas of the open web.
The Trade Desk's CEO, Jeff Green, attempted to quell those concerns on the latest earnings call. He said Amazon is not a direct competitor in open internet advertising because it has a clear incentive to prioritize its own inventory on its marketplace and Prime Video, adding, "The open internet offers a compelling value in contrast to walled gardens. The open internet is where most consumers spend most of their time."
I believe the market is overreacting to Amazon's recent moves, making the stock's decline this year a compelling opportunity for investors. Despite downward revisions, Wall Street still expects The Trade Desk's adjusted earnings to increase at 15% annually through 2028, which makes the current valuation of 22 times earnings look quite fair, if not cheap.
Investors should never lean too heavily on target prices, but I think The Trade Desk could generate 50%-plus returns for shareholders in the next year, provided the economy continues to grow and the competitive landscape remains similar. But even if that doesn't happen, now is a good time to buy a few shares.
NASDAQ: TTD
Key Data Points
Chipotle Mexican Grill: 36% implied upside
Chipotle owns more than 3,900 fast-casual restaurants across North America and Europe. The company has built a reputable brand by focusing on "food with integrity." It exclusively sources responsibly raised meats never treated with hormones or antibiotics, and uses only organically grown produce and fresh ingredients. That means no preservatives, freezers, or can openers are involved in food preparation.
That strategy has resonated with consumers. In the past, Chipotle has regularly reported strong increases in same-store sales and customer traffic, often substantially outpacing competitors. However, the company has stumbled this year due to challenging economic conditions caused by increased student loan repayments, a difficult jobs market, and inflation created by President Trump's tariffs.
In the first and second quarters, same-store sales and customer traffic actually declined. In the third quarter, same-store sales returned to growth, increasing 0.3%, but customer traffic still dropped 0.8%. Those numbers are marginally better than the industry average, according to the National Restaurant Association, but the market has nonetheless been disappointed.
However, I think investors are overly pessimistic, and the recent drawdown creates a good buying opportunity. The Trump administration recently rolled back tariffs on imported beef and avocados, which should benefit Chipotle. And Wall Street expects Chipotle's earnings to increase at 12% annually over the next three years, which makes the current valuation of 27 times earnings look reasonable.
I think shareholders could see 30%-plus gains in the next year, provided the economic backdrop does not worsen.
