3 Growth Stocks Down 70% to Buy Right Now

Figma, The Trade Desk, and Duolingo are trading roughly 79%, 70%, and 82% below their 52-week highs but are still forecasted for double-digit revenue growth in 2026. Figma reported Q4 revenue growth accelerated to +40% with net dollar retention at 136%, though margins remain pressured; The Trade Desk printed +14% revenue in its latest quarter and CEO Jeff Green bought $150M of stock amid ongoing CFO turnover; Duolingo grew MAUs ~30% with 77% on free tiers and trades at <14x forward earnings like The Trade Desk. These are company-specific bargain narratives rather than market-moving events — potential idiosyncratic opportunities if AI-driven competitive risks are manageable.

Analysis

The recent sell-off is creating asymmetric payoff profiles: businesses with durable enterprise embedment or platform economics can be bought as option‑like exposures to continued AI-driven workflow adoption, while asset‑light, volume‑sensitive businesses tied to ad cycles or consumer substitution face tougher paths to re‑acceleration. Expect buyers of enterprise design and collaboration tools to prize integration velocity (APIs, plugins, IDE links) and library/marketplace lock‑ins more than raw top‑line growth; that is where value accrues and where M&A interest is most likely to appear.

In ad tech and consumer edtech, the second‑order effect of AI is not just feature substitution but margin structure change: if AI reduces marginal human labor or automates creative production, incumbents that own first‑party identity and have flexible pricing will defend share, while pure DSPs or single‑product consumer apps will see multiple compression. Near‑term catalysts that will reset sentiment are guidance cadence and product launches from hyperscalers — expect meaningful price action around quarterly guides and any new identity/attribution standards rolled out industry‑wide.

From a portfolio construction standpoint, prefer limited asymmetric longs implemented with defined risk (calendar or vertical spreads) and small, conviction‑weighted shorts into companies with execution fragility (management churn, lumpy ad demand). Time horizon: tactical positions (3–12 months) to capture re‑ratings on beats or M&A whispers, and opportunistic longer‑dated optionality (12–36 months) to capture structural monetization or defensive moats proving out. Keep position sizing small and liquidity high — this is a volatility arbitrage, not a buy‑and‑hold value bet.

Key Decisions for Investors

• Long selective enterprise design exposure (FIG) via a 12‑month call spread: buy 12‑month at‑the‑money calls and sell a single OTM call ~30–40% higher. Size 1.5% NAV. Rationale: captures upside from further enterprise embedding/M&A while capping premium paid; target 2.5x return if product integration accelerates, max loss = premium paid, stop if underlying falls >35% from entry.
• Short programmatic ad execution risk (TTD) via 9–12 month puts sized 1% NAV or a pair trade: short TTD and long a large first‑party data ad leader (GOOGL/ META) sized 1:0.7. Timeframe 6–12 months. Rationale: capitalizes on secular ad share shifts and execution risk from management churn; target capturing 40–60% downside in TTD, hedge reduces beta vs market rallies.
• Long consumer education optionality (DUOL) using 18–24 month LEAPS (buy deep‑ITM calls) financed by selling short‑dated calls (covered/call‑wheel) to collect premium. Size 1–2% NAV. Timeframe 12–24 months. Rationale: asymmetric upside if ARPU and monetization re‑acceleration occurs; downside limited to premium outlay, roll calls if recovery narrative stalls.
• Maintain a watchlist for M&A catalysts in design and collaboration (Adobe, MSFT) and set alerts for large insider buys or recurring beat‑and‑raise cycles. If an outsized acquisition premium appears, be ready to top‑slice longs into the bid; if guidance slips across two consecutive quarters, reduce exposure by 50% within weeks.