3 Beaten-Down Tech Stocks That Should Recover Despite Tariffs

In recent weeks, worries about tariffs imposed by the U.S. government have weighed on the technology sector. In a world that relies heavily on chips made in places like Taiwan and hardware manufactured in countries such as China, the state of the industry has become uncertain, and many tech stocks have fallen as a result.

Nonetheless, the parts of the industry less reliant on hardware are typically less affected by such levies, and this should create an opportunity for investors once the negative sentiment abates. Knowing this, three analysts from The Motley Fool have recommended stocks tied to the tech sector that will help investors sidestep tariff-related worries.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Shares of Meta have retreated nearly 30% from their all-time high

Jake Lerch (Meta Platforms): My choice is Meta Platforms (NASDAQ: META).

After an amazing start to the year, Meta Platforms stock has come crashing back to Earth as market volatility took off. It's hard to believe, but Meta is now down almost 30% from its all-time high and is down about 11% year to date.

Yet, for the long-term investor, this roller coaster ride is simply a bump in the road for a company that continues to grow by leaps and bounds. Granted, the company could experience a setback when it reports earnings on April 30, but if history is any guide, that's unlikely to occur.

Over the last five years, Meta has delivered an average quarterly earnings surprise of 12%; the company's quarterly revenue surprise has averaged 2%. In other words, Meta's management is in the habit of underpromising and overdelivering.

What's more, those earnings and revenue surprises aren't simply some rounding error or outliers. Over that same span of five years, Meta has more than doubled its revenue from $75 billion to $165 billion. The company's net income has nearly tripled -- from $21 billion to $62 billion.

These fantastic fundamentals are thanks to Meta's asset-light business model, which delivers massive profits and free cash flow from the company's enormous user base.

Even more importantly, given current events, Meta isn't the sort of business one would expect to suffer in a trade war. Since about 97% of the company's revenue is derived from advertising, tariffs would appear to have little impact.

At any rate, long-term investors should focus on the big picture: Meta is a solid business with exceptional fundamentals. It's a stock worth considering here on the dip.

The Trade Desk is poised to reward dip buyers over the long term

Justin Pope (The Trade Desk): Shares of The Trade Desk (NASDAQ: TTD) have gotten pummeled since the company's underwhelming Q4 earnings, a rare miss for a company that has consistently performed well for years. Fortunately, this is unlikely to be a long-term issue. The company's independent adtech software enables customers to purchase ad inventory, target ads to their ideal audience, and analyze their campaigns.

The company's Q4 woes were primarily due to disruptions as it transitioned customers to a new artificial intelligence-powered technology platform; therefore, CEO Jeff Green was adamant on the earnings call that it was a temporary setback. The big picture here is that digital advertising is a rapidly growing market, and The Trade Desk has enjoyed steady, profitable growth by providing brands with an alternative to closed ecosystems, such as Meta Platforms and Alphabet.

Brands spent $12 billion on The Trade Desk in 2024, a small sliver of a $900 billion-plus market. It underscores the long runway ahead for the company. The stock is down a whopping 64% from its high, its steepest decline yet as a public company. The good news is that the drop has repriced the stock at a compelling valuation--shares now trade at an enterprise value-to-revenue ratio of just 9.3, its lowest since about 2018.

Tariffs have spooked the stock market, but it's likely a non-issue for The Trade Desk, which generated 87% of its 2024 gross billings in the United States. Plus, China's internet space is infamously isolated from Western countries.

Overall, I believe the stock has a good chance of delivering strong returns over the long term, especially at these current prices. CEO Jeff Green is one of the industry's pioneers and outlined 15 ways the company is capitalizing on the growth trends in digital advertising in the Q4 call. The market punished the stock for its Q4 results, but The Trade Desk still grew revenue by 26% in 2024.

The Trade Desk remains a leading adtech stock, and the cream always rises to the top eventually.

Investors can find opportunity south of the border

Will Healy (MercadoLibre): As tariff concerns worsen, a company heavily reliant on Mexico may seem like the last place investors should look to avoid tariffs.

However, that only applies to Mexican companies tied to the U.S. Other than one fulfillment center that imports U.S. goods into Mexico, that's primarily not the case with the stock I chose, MercadoLibre (NASDAQ: MELI).

MercadoLibre is a tech conglomerate engaged in e-commerce, fintech, and logistics. These businesses work separately and together to serve customers in 18 Latin American countries, with Brazil, Mexico, and Argentina driving most of the company's revenue.

MercadoLibre has prospered despite the region's challenges and, sometimes, because of them. It was a first mover in Latin American e-commerce, making it harder for Amazon and other foreign-based market entrants to compete.

To reach cash-based customers, it created Mercado Pago to help these customers buy online. It was so successful that it opened its services to customers who were not buying from MercadoLibre. Likewise, it created Mercado Envios to bring shipping and fulfillment services to online sellers. Like Mercado Pago, this company has also found success in serving customers separately from its e-commerce site.

Separately and together, MercadoLibre's businesses generated $20.8 billion in revenue in 2024, a 38% increase from year-ago levels. In comparison, operating expenses rose 29%, and the company held the line on other types of expenses. That allowed the company to earn $1.9 billion in net income, 94% more than it did in 2023.

Furthermore, despite tariff concerns, the stock has risen over the last year and recovered some of its losses from a recent bear market sell-off. Consequently, it is now down by approximately 10% from its highs as a result.

Finally, even though it has maintained a high P/E ratio for some years, the earnings multiple has fallen significantly. Hence, at a 56 P/E ratio, MercadoLibre should be an attractive option for investors wanting to avoid tariff-related pressures.

Should you invest $1,000 in Meta Platforms right now?

Before you buy stock in Meta Platforms, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Meta Platforms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Alphabet, Amazon, MercadoLibre, and The Trade Desk. Justin Pope has no position in any of the stocks mentioned. Will Healy has positions in MercadoLibre and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, MercadoLibre, Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy.