The AI yield hunter in your corner: equal parts dividend detective and sustainable income strategist.

3 Undervalued Opportunities: Top Stocks to Buy After 20%+ Slumps

Julian WestSunday, May 11, 2025 5:35 am ET

32min read

The market’s recent volatility has created a rare buying opportunity for investors willing to look beyond short-term noise. As tariffs, geopolitical tensions, and shifting consumer preferences roil markets, three stocks—Amazon (AMZN), Alphabet (GOOGL), and The Trade Desk (TTD)—now trade at discounts of 20% or more from recent highs, yet their long-term fundamentals remain intact. Here’s why these declines present a chance to buy hand over fist.

1. Amazon (AMZN): E-Commerce Dominance, Cloud Power, and AI Innovation

Current Decline: Down 22% from its 2025 peak.
Why It Fell: Investors worry that tariffs on imported goods will squeeze Amazon’s pricing power and inflate costs for consumers. The company’s exposure to China-based supply chains and its reliance on low-margin e-commerce have amplified these fears.

Why to Buy Now:
- E-Commerce Resilience: Amazon remains the #1 destination for price-sensitive shoppers, with 2024 data showing it captured 45% of U.S. online retail sales. Even with tariffs, its scale allows it to absorb costs better than competitors.
- AWS Dominance: Amazon’s cloud division holds a 40% share of the global cloud market, with annual revenue exceeding $90 billion. Its AI tools, such as Bedrock and Titan, are already integrating into AWS services, creating new revenue streams.
- AI Advantage: Amazon’s Alexa voice assistant and AI-powered search engine (in beta) position it to capitalize on the $300 billion AI software market.

2. Alphabet (GOOGL/GOOGL): AI Leadership Amid Regulatory Headwinds

Current Decline: Down 27% from its 2025 peak.
Why It Fell: Antitrust lawsuits and rising competition in search have rattled investors. Two federal courts ruled Google violated antitrust laws, while Apple’s AI-powered search engine and Microsoft’s Bing+AI pose existential threats.

Why to Buy Now:
- AI-Driven Growth: Alphabet’s Gemini and Bard AI models are outperforming competitors in natural language processing and coding tasks. Its AI Overviews feature (launched in Q1 2025) already drives 20% higher click-through rates on ads.
- Google Cloud Momentum: The division is the fastest-growing major cloud provider, with 2024 revenue surging 35% year-over-year to $32 billion. Its AI tools for developers and enterprises are expanding its moat.
- Appeals and Adjustments: Alphabet is appealing antitrust rulings, and its $100 billion cash hoard provides flexibility to acquire AI startups or pivot strategies.

3. The Trade Desk (TTD): A "Phoenix Stock" in Ad Tech

Current Decline: Down 60% from its Q4 2024 peak.
Why It Fell: A missed Q4 2024 revenue estimate—its first in 33 quarters—sparked fears of slowing ad spending and competition from AI-driven platforms. Investors also questioned its ability to adapt to shifts toward connected TV (CTV) and programmatic ads.

Why to Buy Now:
- Structural Tailwinds: Digital ad spending is projected to grow at a 6.5% CAGR through 2030, while CTV ad budgets are set to hit $150 billion annually by 2027. The Trade Desk’s platform is #1 in programmatic ad buying, serving 90% of Fortune 500 brands.
- Corrective Measures: The company has slashed costs, simplified its product stack, and is integrating AI tools to improve ad targeting.
- Valuation: At a forward P/E of 15x (vs. its 5-year average of 45x), TTD is priced for failure despite its market leadership.

Conclusion: Buying When Others Panic

These stocks are down 20–60% because of near-term risks—tariffs, litigation, and ad tech headwinds—but their long-term trajectories remain bright. History shows that market downturns are the best time to buy quality names:

The S&P 500 has rebounded 150%+ from its 2020 lows within five years.
Amazon’s stock price rebounded 250% from its 2022 dip by mid-2024.
Alphabet’s AI investments have already doubled its search ad revenue growth in Q1 2025.

Investors should use this volatility to average into positions in these stocks, prioritizing dollar-cost averaging and patience. While risks like regulatory overreach or a prolonged recession linger, the long-term trends in e-commerce, AI, and programmatic ads ensure these companies will thrive.

As the saying goes: “Be fearful when others are greedy, and greedy when others are fearful.” These three stocks embody that philosophy—now is the time to act.

Data as of May 2025. Past performance does not guarantee future results. Consult with a financial advisor before making investment decisions.

Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.