The stock market is often unpredictable, but historical data can offer valuable insights for investors. Recently, the S&P 500 has shown impressive growth, rising 20.5% since June 9, 2025. This level of growth has only been achieved five times since 1950, and each time, the market went on to increase by an average of 31% in the following year. This historical trend gives investors confidence that the coming year could see another significant market rally.
Looking at the current numbers, the S&P 500's target is expected to reach 7,868 points, a 26% increase from its current level of 6,230. While past performance is no guarantee of future returns, investors tend to rely on historical trends when deciding to invest, especially when they see market potential.
Against this backdrop, two stocks have stood out to Wall Street analysts as undervalued at their current prices: The Trade Desk and Okta. Both companies are heavily involved in artificial intelligence (AI), and they lead in their respective industries. The Trade Desk is a powerhouse in the adtech sector, while Okta dominates identity and access management (IAM). Both companies are poised to capitalize on future growth, driven by advancements in AI.
The Trade Desk operates an independent demand-side platform (DSP) in the adtech industry, using AI to help media buyers optimize digital ad campaigns. As advertisers increasingly shift their budgets toward streaming platforms, The Trade Desk has become a major player, thanks to partnerships with industry giants like Disney, Netflix, and Roku.
Jeff Green, the CEO of The Trade Desk, recently shared that the company saw a 25% increase in revenue, reaching $616 million in the first quarter, while non-GAAP net income grew by 27%. This performance far exceeds the broader industry average. The adtech market is expected to grow at a rate of 14% annually through 2030, providing a massive tailwind for The Trade Desk. What sets the company apart is its independent business model, which is more aligned with clients' interests compared to competitors like Google and Meta. Moreover, The Trade Desk launched its AI-powered Kokai platform, which helps clients optimize ad targeting and bidding algorithms. This platform is expected to attract more clients and accelerate the company's growth.
On the other hand, Okta leads in the field of identity and access management, a critical cybersecurity framework that allows companies to control who has access to sensitive resources. As AI becomes more widespread, the importance of IAM will only grow. Todd McKinnon, CEO of Okta, shared that the company’s first-quarter results were strong, with a 12% increase in revenue, reaching $688 million, and a 32% jump in non-GAAP net income. However, the stock saw a dip after management chose not to raise full-year guidance, citing macroeconomic uncertainty.
That said, Okta is well-positioned for future growth. Grand View Research predicts that the IAM market will expand by 12.6% annually through 2030, and Okta, as the leader in this space, stands to gain a significant share of this market. With more businesses deploying AI systems, Okta's solutions will be essential for managing the security and access of autonomous systems. Okta’s technology, which continuously assesses risk, ensures that only the right users can access the right resources.
Despite both companies’ stock prices appearing relatively high, analysts still view The Trade Desk and Okta as undervalued. The Trade Desk’s target price is set at $84 per share, a 15% increase from its current price of $73. Okta’s target price is set at $130, which implies a 34% upside from its current price of $97. These companies stand out not only for their leadership in their respective industries but also for their long-term growth potential driven by AI advancements.
Overall, while the stock market remains uncertain, the historical data and industry growth trends suggest that the next year could see a strong rally. In this wave, The Trade Desk and Okta, as leaders in AI, are likely to benefit. For investors, these companies present a solid opportunity for long-term growth. However, it’s essential to remember that all investments come with risks, and past performance doesn't guarantee future returns. Investors should approach these opportunities with caution and align their decisions with their investment goals and risk tolerance.