We're Adding These 2 Tech Stocks to the Bullpen
Both names are plays on 2024 election spending and growth in digital advertising.
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* We are placing Meta Platforms and The Trade Desk in the Portfolio Bullpen.
* Both names are plays on 2024 election spending and continued growth in digital advertising.
We are adding two companies to the Portfolio's Bullpen as plays on the expected surge in digital advertising this year, owing to the 2024 presidential election, and also the ongoing shift away from print, radio, and broadcast media.
Expectations are that U.S. political advertising will jump by nearly a third, to $12.3 billion, this year compared to the previous election. The digital component is projected to skyrocket by more than 150%, compared to 2020, to around $3.5 billion.
We expect to see this benefit our Alphabet (GOOGL) shares, especially through its YouTube platform. However, two other companies that are poised to benefit, especially since TikTok does not permit political ads on the platform, are Meta Platforms META and The Trade Desk TTD.
Meta has various platforms, including Facebook and Instagram, while Trade Desk is a cloud-based platform that allows for the buying of ads across formats (including video), channels, and devices (computers, TVs, mobile devices, and streaming devices).
After already spiking this year because of election spending, digital advertising is slated to chip away further at traditional media in the coming years, which explains why these companies, as well as Apple AAPL, Amazon AMZN, Netflix NFLX, Disney DIS and others, are looking to tap into the market.
Meta and Trade Desk shares have been strong performers so far this year, likely due to robust EPS growth expectations for both. Over the 2023-2025 period, Meta is expected to grow its EPS by more than 50%, while the market sees Trade Desk growing its EPS by just over 40% for the same period. While technical support levels are moving up for both stocks, the key 50-day, 100-day, and 200-day moving averages for TTD are tightly clustered together between $74-$79, while support for META is far lower and dispersed between $356-$475.
The key for us will be determining how much more potential upside there is as well as where there are potentially favorable risk-to-reward entry points. This is why we have the Bullpen, and as we formulate those thoughts, we will share them with you. We also remind you that being put in the Bullpen does not guarantee a stock will be added to the Portfolio.
At the time of publication, TheStreet Pro Portfolio is long GOOGL, AAPL and AMZN.
