Motley Fool Money: The Trade Desk Joins the S&P 500 – July 17, 2025
Hosted by John Quast with insights from Matt Frankel and Tom Gardner
1. Introduction
In the July 17, 2025 episode of Motley Fool Money, host John Quast delves into several pivotal financial topics, starting with the significant addition of The Trade Desk to the S&P 500 index. Joining him are longtime Motley Fool contributor Matt Frankel and Motley Fool co-founder Tom Gardner. The discussion spans the implications for investors, the surge in Bitcoin investments, the rising popularity of stock options trading, and highlights a few promising "hidden gem" stocks poised to outperform the market.
2. The Trade Desk Joins the S&P 500
Impact on Shareholders
The episode opens with John Quast addressing the recent developments surrounding The Trade Desk. Following Synopsys's $35 billion acquisition of ANSYS, an open spot in the S&P 500 is being filled by The Trade Desk, an advertising technology firm.
Matt Frankel emphasizes the immediate benefits for shareholders:
"If anything, it's time to take a victory lap. The biggest impact in the immediate sense is just that the S&P 500 index funds are all going to be required to buy shares..." (01:18)
Being part of the S&P 500 means increased visibility and demand for The Trade Desk's stock, particularly from large index funds that hold substantial portions of S&P components.
Company Performance and Future Prospects
Tom Gardner provides a historical perspective on The Trade Desk, highlighting its impressive growth since its 2016 IPO:
"Up 2,600% since going public in 2016... it's now a $40 billion market cap company." (02:24)
He notes that while the inclusion in the S&P 500 is a commendable milestone, the company's future success hinges on its continued business performance amidst rising competition. Gardner points out that The Trade Desk's focus on programmatic advertising and connected TV has positioned it well in a growing sector, although achieving the same explosive returns as in the past may be challenging.
John Quast concurs, reflecting on the company's resilience after missing guidance and its ability to maintain long-term growth despite short-term setbacks:
"It really is just an example of the hidden gems process at work." (01:50)
Tom Gardner adds:
"I would say Trade Desk is looking more fully valued now, more fully appreciated in the marketplace. I still think it can beat the market from here..." (02:24)
3. Bitcoin’s Rising Institutional Adoption
Current Landscape
The conversation shifts to Bitcoin, highlighting its position as the world's largest cryptocurrency nearing an all-time high. Institutional interest has surged, with companies like Semler Scientific and BlackRock making substantial Bitcoin purchases.
Tom Gardner discusses the evolution of Bitcoin investment:
"We're moving to the stage after the first 15 years where we're starting to see corporations and financial institutions buying." (06:56)
He underscores the transition from speculative individual investments to serious institutional adoption, bolstered by the introduction of Bitcoin ETFs and regulatory clarity.
Investment Considerations
Matt Frankel shares a personal anecdote and current perspectives:
"I was one of those weird guys back in 2013 with a little mining rig set up in my house... I wish I had kept the three bitcoin or so that I had mined till now." (09:22)
He highlights the growing regulatory acceptance and potential for increased trading volumes, which could drive long-term upward momentum despite Bitcoin's inherent volatility.
Tom Gardner offers a broader economic view:
"I think bitcoin is going to outperform the market substantially over the next five to 10 years, but it will be volatile." (08:31)
He draws parallels between Bitcoin and gold, suggesting that as governments grapple with fiscal responsibilities, alternative assets like Bitcoin may become more attractive as stores of value.
John Quast concludes the Bitcoin segment by emphasizing the fundamental differences between cryptocurrencies and traditional stocks, advising investors to approach Bitcoin with an understanding of its unique dynamics.
4. Surge in Stock Options Trading
Current Trends
The podcast highlights a notable surge in stock options trading, particularly zero-day options, which expire on the same day they are purchased. Robinhood reported a 46% increase in options trading in the first quarter of 2025 compared to the previous year.
Matt Frankel attributes this surge to renewed investor appetite for speculation, reminiscent of the 2021 era:
"Speculative options bets go correctly, which I would be willing to bet is most of what's happening on Robinhood." (11:09)
He draws parallels to the GameStop rally, emphasizing that options trading allows investors to amplify their speculative moves.
Risks of Short-Term Trading
Tom Gardner expresses caution regarding the increasing popularity of zero-day options:
"It's going to cause more volatility than normal in those types of investments." (12:29)
He warns that the current market conditions, characterized by high valuations and increased speculation, are not conducive to short-term trading strategies. Gardner advises a more cautious and moderate investment approach, suggesting that now is not the time to engage in high-risk speculative trades.
John Quast echoes this sentiment, sharing personal experiences of better investment outcomes through long-term strategies rather than short-term speculation.
5. Hidden Gems: Promising Stock Picks
Towards the end of the episode, the hosts spotlight several "hidden gem" stocks that they believe have the potential to outperform the market.
Rocket Companies (Ticker: RKT)
Matt Frankel praises Rocket Companies for its strategic acquisitions and growth prospects:
"Rocket Companies is the parent company of Rocket Mortgage, Quicken Loans, and a few other financial businesses... their loan volume in 2021 was about four times what it is now." (16:03)
He anticipates a refinancing boom if mortgage rates decline, positioning Rocket Companies to capitalize on increased refinancing activity.
Progressive Corporation (Ticker: PGR)
Tom Gardner highlights Progressive Corporation for its strong performance and strategic advantages:
"Progressive is expecting their combined ratio to fall close to 87%, demonstrating extreme underwriting discipline." (17:22)
He commends Progressive's commitment to telematics and technology, which has given them a competitive edge over peers like Geico. Gardner views Progressive as a stable, low-volatility investment with potential for market outperformance.
Xometry (Ticker: XMTR)
John Quast introduces Xometry as an AI-powered manufacturing marketplace poised for growth amidst the onshoring trend in US manufacturing:
"Xometry is in a really good place to be able to pick up some of that business. First quarter revenue up 23%. It just turned profitable." (19:10)
Tom Gardner adds that Xometry's advancements in AI and significant investments in technology make it a compelling investment opportunity, urging listeners to explore further within the Motley Fool’s resources.
6. Conclusion
John Quast wraps up the episode by reminding listeners to consider the Motley Fool's recommendations thoughtfully and to adhere to their investment strategies rather than making decisions based solely on podcast discussions.
"Don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards..." (21:17)
The episode provides a comprehensive analysis of The Trade Desk's inclusion in the S&P 500, the evolving landscape of Bitcoin investments, the risks associated with the surge in options trading, and actionable insights into potential high-performing stocks. Listeners are encouraged to maintain a balanced and informed approach to their investment strategies amidst the dynamic market conditions.
Key Takeaways:
- The Trade Desk's addition to the S&P 500 signifies increased institutional interest and potential upward pressure on its stock price, though future growth may stabilize.
- Bitcoin is transitioning from a speculative asset to one embraced by institutions, with potential for substantial long-term growth despite volatility.
- The surge in stock options trading, particularly zero-day options, presents significant risks and underscores the importance of a long-term investment approach.
- Hidden gems like Rocket Companies, Progressive Corporation, and Xometry offer promising opportunities due to strategic positioning and market trends.
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