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The Trade Desk Registers 55% YTD Decline: Is the Stock Still a Hold?
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Key Takeaways
The Trade Desk stock has tumbled 54.5% YTD, lagging the Internet Services industry's 30.4% growth.
Ad-spending caution, higher costs, and competition from giants like Amazon are concerns.
TTD's CTV, Kokai AI platform and UID2 initiatives remain key growth drivers despite near-term hurdles.
The Trade Desk (TTD - Free Report) stock has registered a sharp decline of 54.5% year to date, underperforming the Zacks Internet Services industry’s growth of 30.4% while the Zacks Computer & Technology sector and the S&P 500 Composite have gained 22.8% and 15% over the same time frame, respectively.
TTD stock has also underperformed peers like Amazon (AMZN - Free Report) , Magnite (MGNI - Free Report) and PubMatic (PUBM - Free Report) . AMZN and MGNI have gained 1.1% and 20%, respectively, while PUBM is down 43.7%.
Price Performance
Image Source: Zacks Investment Research
TTD gained 0.7% last day and closed the session at $53.49, which is way below its 52-week high of $141.53 and closer to its 52-week low of $42.96.
The key question now is, does the recent decline make TTD a buying opportunity, or should investors simply hold on and wait for the storm to pass?
Let’s break down the key advantages and potential risks to help determine the smartest move for your portfolio.
What Triggered the Sharp Decline for TTD?
The recent downturn in The Trade Desk’s stock price can be largely attributed to a cautious ad spending environment. Macroeconomic uncertainty could prove a drag on advertising budgets. TTD remains cautious regarding the impact of the volatile macro backdrop, particularly on the large global brands. If macro headwinds worsen or persist through the remainder of 2025, revenue growth may face further pressure due to reduced programmatic demand.
While The Trade Desk remains a leading independent DSP, the competitive environment is intensifying. Walled gardens like Google and Amazon dominate this space as they control their inventory and first-party user data, allowing for highly targeted ad campaigns. Even smaller players like Magnite and PubMatic are expanding their presence in CTV and retail media and competing for ad dollars. While CTV remains a strong revenue driver, this market is also increasingly becoming competitive. AMZN’s expanding DSP business is giving tough competition to TTD, especially in this space.
Regulatory and privacy-related changes like the deprecation of cookies and tightening data-privacy laws like Europe’s GDPR also pose ongoing challenges.
Higher expenses are likely to weigh on profitability. In the last reported quarter, total operating costs surged 17.8% year over year to $577.3 million. Expenses soared on account of continued investments in boosting platform capabilities, particularly platform operations. Higher costs can prove a drag on margins, especially if revenue growth does not keep pace.
Overreliance on North America for revenues is another concern. Though TTD is focusing on geographic expansion, executing well across disparate markets can be complex and risky.
Image Source: Zacks Investment Research
Given all these, analysts have marginally revised estimates downward for the current year.
Lofty Valuation: A Key Concern
TTD stock is not so cheap, as its Value Style Score of F suggests a stretched valuation at this moment. The stock is trading at a premium, with a forward 12-month price/sales of 8.04X compared with the industry’s 6.46X.
Image Source: Zacks Investment Research
TTD Has Multiple Tailwinds
Despite near-term headwinds, The Trade Desk has multiple tailwinds that could buoy its long-term growth. These include Connected TV (CTV), retail media, international expansion, Kokai, UID2 and OpenPath.
One of the most compelling long-term opportunities for The Trade Desk is CTV, the fastest-growing segment of the digital ad market. On the last earnings call, management highlighted that programmatic CTV continues to deliver the “most effective and highest return on ad spend,” strengthening TTD’s position in the CTV market. Video, which includes connected CTV, accounted for a high-40s percentage of its overall business and continues to increase its share of the mix in the quarter. It also has forged deep partnerships with Disney, NBCU, Roku, Netflix, LG and Walmart, among others.
TTD is also focused on securing long-term, high-value partnerships with major advertisers, agencies, and publishers. The company now has nearly 100 joint business plans in the pipeline. These deals are expected to boost revenue visibility.
Live sports streaming is emerging as a pivotal part of the company’s CTV strategy. TTD is looking to offer advertisers the full value of live sports by allowing them to bid on key moments in live games, such as NBA overtime or soccer penalty shootouts, when engagement peaks. This type of precision targeting highlights the advantages of programmatic CTV, expanding opportunities for advertisers to connect with audiences in real time.
The company’s AI-powered Kokai platform further strengthens its competitive moat. More than 70% of clients are now using the company’s Kokai platform, with full client adoption expected to be completed by this year. The integration of Koa AI tools was highlighted by management as a “game changer” for the Kokai platform, as it can deliver significant gains in campaign precision, efficiency and outcomes..
Complementing Kokai, OpenPath is simplifying the programmatic supply chain by allowing publishers to integrate directly with The Trade Desk’s platform. A major differentiator for TTD has been its consistent focus on innovation and identity solutions, particularly through UID2, its open-source alternative to third-party cookies
It recently unveiled Audience Unlimited, a major enhancement to its marketplace for third-party data. Advertisers remain wary of third-party data, citing high costs and uncertainty over effectiveness. Audience Unlimited tackles these issues by using AI to rank third-party data segments for campaign relevance, drawing from hundreds of trusted providers. Instead of costly a la carte pricing, advertisers gain access to all relevant data at a simplified, lower inclusive rate, enabling scalable precision targeting without unpredictable costs or reconciliation hassles.
For the third quarter of 2025, the company anticipates revenues of at least $717 million, indicating 14% year-over-year growth.
Bottom Line: TTD is Still Worth Holding
While the 54.5% YTD drop reflects near-term challenges like macroeconomic ad-spending caution and intense competition from "walled gardens" like Google and Amazon, The Trade Desk’s increasing footprint in high-growth areas like CTV and retail media, bolstered by its innovative Kokai AI platform, offers a strong competitive moat.
Given the balance of tailwinds against persistent headwinds and a lofty valuation, new investors should wait for clearer signs of revenue growth outpacing cost increases and macro uncertainty to dissipate. However, investors already owning the stock can stay put.
Image: Bigstock
The Trade Desk Registers 55% YTD Decline: Is the Stock Still a Hold?
Key Takeaways
The Trade Desk (TTD - Free Report) stock has registered a sharp decline of 54.5% year to date, underperforming the Zacks Internet Services industry’s growth of 30.4% while the Zacks Computer & Technology sector and the S&P 500 Composite have gained 22.8% and 15% over the same time frame, respectively.
TTD stock has also underperformed peers like Amazon (AMZN - Free Report) , Magnite (MGNI - Free Report) and PubMatic (PUBM - Free Report) . AMZN and MGNI have gained 1.1% and 20%, respectively, while PUBM is down 43.7%.
Price Performance
Image Source: Zacks Investment Research
TTD gained 0.7% last day and closed the session at $53.49, which is way below its 52-week high of $141.53 and closer to its 52-week low of $42.96.
The key question now is, does the recent decline make TTD a buying opportunity, or should investors simply hold on and wait for the storm to pass?
Let’s break down the key advantages and potential risks to help determine the smartest move for your portfolio.
What Triggered the Sharp Decline for TTD?
The recent downturn in The Trade Desk’s stock price can be largely attributed to a cautious ad spending environment. Macroeconomic uncertainty could prove a drag on advertising budgets. TTD remains cautious regarding the impact of the volatile macro backdrop, particularly on the large global brands. If macro headwinds worsen or persist through the remainder of 2025, revenue growth may face further pressure due to reduced programmatic demand.
While The Trade Desk remains a leading independent DSP, the competitive environment is intensifying. Walled gardens like Google and Amazon dominate this space as they control their inventory and first-party user data, allowing for highly targeted ad campaigns. Even smaller players like Magnite and PubMatic are expanding their presence in CTV and retail media and competing for ad dollars. While CTV remains a strong revenue driver, this market is also increasingly becoming competitive. AMZN’s expanding DSP business is giving tough competition to TTD, especially in this space.
Regulatory and privacy-related changes like the deprecation of cookies and tightening data-privacy laws like Europe’s GDPR also pose ongoing challenges.
Higher expenses are likely to weigh on profitability. In the last reported quarter, total operating costs surged 17.8% year over year to $577.3 million. Expenses soared on account of continued investments in boosting platform capabilities, particularly platform operations. Higher costs can prove a drag on margins, especially if revenue growth does not keep pace.
Overreliance on North America for revenues is another concern. Though TTD is focusing on geographic expansion, executing well across disparate markets can be complex and risky.
Image Source: Zacks Investment Research
Given all these, analysts have marginally revised estimates downward for the current year.
Lofty Valuation: A Key Concern
TTD stock is not so cheap, as its Value Style Score of F suggests a stretched valuation at this moment. The stock is trading at a premium, with a forward 12-month price/sales of 8.04X compared with the industry’s 6.46X.
Image Source: Zacks Investment Research
TTD Has Multiple Tailwinds
Despite near-term headwinds, The Trade Desk has multiple tailwinds that could buoy its long-term growth. These include Connected TV (CTV), retail media, international expansion, Kokai, UID2 and OpenPath.
One of the most compelling long-term opportunities for The Trade Desk is CTV, the fastest-growing segment of the digital ad market. On the last earnings call, management highlighted that programmatic CTV continues to deliver the “most effective and highest return on ad spend,” strengthening TTD’s position in the CTV market. Video, which includes connected CTV, accounted for a high-40s percentage of its overall business and continues to increase its share of the mix in the quarter. It also has forged deep partnerships with Disney, NBCU, Roku, Netflix, LG and Walmart, among others.
TTD is also focused on securing long-term, high-value partnerships with major advertisers, agencies, and publishers. The company now has nearly 100 joint business plans in the pipeline. These deals are expected to boost revenue visibility.
Live sports streaming is emerging as a pivotal part of the company’s CTV strategy. TTD is looking to offer advertisers the full value of live sports by allowing them to bid on key moments in live games, such as NBA overtime or soccer penalty shootouts, when engagement peaks. This type of precision targeting highlights the advantages of programmatic CTV, expanding opportunities for advertisers to connect with audiences in real time.
The company’s AI-powered Kokai platform further strengthens its competitive moat. More than 70% of clients are now using the company’s Kokai platform, with full client adoption expected to be completed by this year. The integration of Koa AI tools was highlighted by management as a “game changer” for the Kokai platform, as it can deliver significant gains in campaign precision, efficiency and outcomes..
The Trade Desk Price, Consensus and EPS Surprise
The Trade Desk price-consensus-eps-surprise-chart | The Trade Desk Quote
Complementing Kokai, OpenPath is simplifying the programmatic supply chain by allowing publishers to integrate directly with The Trade Desk’s platform. A major differentiator for TTD has been its consistent focus on innovation and identity solutions, particularly through UID2, its open-source alternative to third-party cookies
It recently unveiled Audience Unlimited, a major enhancement to its marketplace for third-party data. Advertisers remain wary of third-party data, citing high costs and uncertainty over effectiveness. Audience Unlimited tackles these issues by using AI to rank third-party data segments for campaign relevance, drawing from hundreds of trusted providers. Instead of costly a la carte pricing, advertisers gain access to all relevant data at a simplified, lower inclusive rate, enabling scalable precision targeting without unpredictable costs or reconciliation hassles.
For the third quarter of 2025, the company anticipates revenues of at least $717 million, indicating 14% year-over-year growth.
Bottom Line: TTD is Still Worth Holding
While the 54.5% YTD drop reflects near-term challenges like macroeconomic ad-spending caution and intense competition from "walled gardens" like Google and Amazon, The Trade Desk’s increasing footprint in high-growth areas like CTV and retail media, bolstered by its innovative Kokai AI platform, offers a strong competitive moat.
Given the balance of tailwinds against persistent headwinds and a lofty valuation, new investors should wait for clearer signs of revenue growth outpacing cost increases and macro uncertainty to dissipate. However, investors already owning the stock can stay put.
At present, TTD carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.