The Nasdaq Composite (^IXIC -2.61%) has dropped 8% from the record high in reached in February. Investors are worried about how the trade war will impact the economy. But certain Wall Street analysts see the drawdown as an opportunity to buy shares of Tesla (TSLA -5.61%) and The Trade Desk (TTD -2.34%)

• Dan Ives at Wedbush recently set his bull-case target price on Tesla at $650 per share. That implies 136% upside from its current share price of $275. Ives expects demand to improve and the Trump administration to fast-track its entrance into the robotaxi market.
• Chris Kuntarich at UBS recently raised his target price on The Trade Desk to $148 per share. That implies 124% upside from its current share price of $66. The stock fell sharply after a disappointing fourth-quarter report, but Kuntarich says the sell-off was overdone.

Here's what investors should know about Tesla and The Trade Desk.

Tesla: 136% implied upside

Tesla disappointed investors in the fourth quarter. Apart from recording its first decline in annual deliveries, revenue increased only 2% to $27.5 billion, operating margin contracted 2 percentage points, and non-GAAP earning increase only 3% to $0.73 per diluted share. Tesla has now missed Wall Street's consensus earnings estimate in five of the last six quarters.

Tesla narrowly maintained its leadership in electric vehicle sales last year, but it slipped to third place behind Chinese automakers BYD and Geely in January 2025. Unit sales declined by a double-digit percentage in all three major geographies. Specifically, unit sales dropped 45% in Europe, 15% in China, and 13% in the U.S., according to Barron's.

Some analysts think CEO Elon Musk involving himself in politics has contributed to weak demand in recent months. But Dan Ives at Wedbush believes ties with the Trump administration will be a tailwind for Tesla, as they could hasten regulatory approval of its autonomous driving technology. Ives sees autonomous driving as a $1 trillion opportunity for Tesla.

Importantly, Tesla will debut an autonomous ride-sharing (robotaxi) service in Austin in June 2025, followed by "several other cities in America by the end of this year," according to Musk. Tesla also plans to build 10,000 Optimus humanoid robots for internal use in 2025, and may start selling Optimus to other companies as early as the second half of 2026.

Wall Street anticipates Tesla's adjusted earnings will increase 16% in 2025. That makes the current valuation of 115 times earnings look very expensive. But the consensus for 2025 says nothing about how earnings may increase as Tesla monetizes autonomous driving and robotics technology in the future. Those products could remake the company.

Here is the bottom line: Tesla is a risky investment because its future is essentially binary. Either it disrupts the mobility and labor markets with artificial intelligence (AI) products, in which case the company becomes much more valuable. Or else it fails to disrupt the those markets, in which case it becomes much less valuable.

Investors confident in the first outcome should own Tesla stock, and now is good time to buy a small position. But barring some unanticipated good fortune, I doubt shareholders will see triple-digit returns in the next year.

The Trade Desk: 124% implied upside

The Trade Desk operates the leading independent ad tech platform for media buyers. Its technology helps ad agencies and brands automate, measure, and optimize data-driven campaigns across digital channels. The Trade Desk was among the first companies to enhance its ad tech platform with artificial intelligence tools, according to Frost & Sullivan.

The Trade Desk has a particularly strong presence in connective TV and retail advertising, where eMarketer estimates spending will increase at an annualized 13% and 17%, respectively, through 2028. The Trade Desk accesses ad inventory from streaming leaders like Netflix, Roku, and Walt Disney, and it sources data from retail leaders like Albertsons, Target, and Walmart.

Investors were unhappy with The Trade Desk's financial results in the fourth quarter, particularly because it missed its own revenue guidance for the first time in 33 quarters. Revenue increased 22% to $741 million, far short of the $756 million management anticipated. But non-GAAP earnings still rose 44% to $0.59 per diluted share, and CEO Jeff Green chalked the revenue shortfall up to "a series of small execution missteps," rather than some deeper problem.

He also detailed steps the company was taking to improve its product. "Across all parts of our platform, we're using AI to help clients make better decisions," Green told analysts on the fourth-quarter earnings call. "We continue to look at our technology stack and ask, where can we inject AI and enhance our product and client outcomes? Over and over again, we are finding new opportunities to make AI investments."

Wall Street expects The Trade Desk's adjusted earnings to grow 8% in 2025. That makes the current valuation of 40 times adjusted earnings look expensive, but I think analysts are overly pessimistic after the recent sales shortfall. The Trade Desk beat the consensus earnings estimate by an average of 8% in the last six quarters. If that pattern continues, the current valuation would look sensible in hindsight.

Personally, I doubt The Trade Desk will produce triple-digit returns for shareholders in the next year, but patient investors should treat the current situation as a buying opportunity.