Both The Trade Desk (TTD Quick QuoteTTD - Free Report) and Amazon (AMZN Quick QuoteAMZN - Free Report) are expected to gain from momentum in the digital advertising space, given their pivotal roles in the programmatic advertising ecosystem. According to a Precedence Research report, the global digital advertising market is expected to witness a CAGR of 13.2% from 2026 to 2035.

TTD operates a pure-play demand-side platform (“DSP”) that helps advertisers focus on data-driven ads. Amazon, on the other hand, is an e-commerce and cloud giant with advertising quickly becoming one of its key revenue drivers.

Both firms have sizeable exposure to the booming connected TV (“CTV”) and retail media trends. Despite their shared tailwinds, Trade Desk and Amazon represent very different investment profiles.

Understanding the strengths, weaknesses and risk-reward dynamics of each is essential for determining which stock may be the better pick right now.

TTD: Plenty of Challenges

The abrupt slowdown in revenue growth is concerning. Second-quarter revenue growth was a mere 3% compared with 12% in the first quarter of 2026.  

Trade Desk highlighted ongoing pressure in key verticals such as Food & Drink and Home & Garden as consumer-packaged goods (“CPG”) brands face geopolitical uncertainty, input inflation and consumer softness. While automotive is an “area of strength overall”, it is also impacted by tariffs, management added. CPG and autos together account for about 25% of TTD’s business, increasing exposure to cautious enterprise budgets.

Management highlighted that the economic uncertainty is putting pressure on lower-income consumers, prompting advertisers to prioritize cheaper media alternatives. The company also admitted execution gaps contributed to the underperformance.

Near-term visibility remains challenging as management's third-quarter guidance assumes no meaningful improvement in the macro backdrop. For the third quarter, management expects revenues of at least $650 million and adjusted EBITDA of approximately $160 million.

The Trade Desk Revenue (Quarterly)

 

The Trade Desk revenue-quarterly | The Trade Desk Quote

The competitive environment is also intensifying. Walled gardens like Meta Platforms, Alphabet and AMZN offer fierce competition in this space as they control their inventory and first-party user data, allowing for highly targeted ad campaigns.  

Despite the near-term challenges, TTD has several encouraging trends that could drive its long-term growth prospects. Increasing digital spending in CTV, particularly for premium content and live sports, is a key growth driver. In the second quarter, video — which includes CTV — represented a low-50s percentage share of the total business. The shift from linear TV to CTV is still in early stages, providing a long runway for growth. CTV in both EMEA and APAC increased more than 50% year over year, showing that adoption is broadening beyond the United States.

The company is also leaning into AI and measurement that tie media to outcomes. TTD recently unveiled Kokai Zuma, the latest release of its Kokai platform. Zuma brings new agentic AI capabilities and a simpler measurement framework to improve navigation on the Kokai platform for buyers and focus more closely on business outcomes

International expansion also provides considerable runway. Management stated that EMEA and APAC revenues have grown almost 30% year to date, while China has expanded more than 100%. These trends are encouraging as they widen Trade Desk’s growth base beyond the U.S. market, which still accounted for approximately 83% of second-quarter revenues.

Beyond CTV, retail media has emerged as one of the fastest-growing areas in the digital advertising space. Trade Desk’s deeper relationships with major advertisers represent another positive. The company had 217 clients with Joint Business Plans as of the second quarter, up 38% year over year.

AMZN: An Established Giant With Increasing Ad Focus

Amazon’s advertising business has gradually emerged as a strong contender in the digital advertising space, leveraging its first-party data. Advertising revenues jumped 26% year over year to $19.8 billion in the second quarter of 2026, with Sponsored Products remaining its key growth driver. AMZN’s DSP platform enables advertisers to plan, activate and measure full-funnel investments.

The company is also strengthening its position in CTV and premium video advertising. Amazon is also witnessing continued growth and engagement in Prime Video ads and live sports, with inventory across the NBA, WNBA, Thursday Night Football and NASCAR selling out. On the last earnings call, management noted that brands advertising across multiple sports achieved 2.3 times higher unduplicated reach than single-sport advertisers.

The company is strengthening its advertising capabilities through AI-powered tools such as Ads Agent, which reduces campaign setup and targeting time. The growing adoption of Amazon’s AI-powered shopping experiences could further strengthen its proposition. Management noted that shoppers clicking a sponsored prompt converted to a sale 48% more often and spent 21% more on average than shoppers who did not.

The company recently announced a partnership with OpenAI to support advertising in ChatGPT, expanding its reach into conversational AI. The new partnership will allow advertisers to expand their Amazon Ads campaigns to ChatGPT, with select advertisers in the U.S. testing the integration.

Amazon.com, Inc. Revenue (Quarterly)

Amazon.com, Inc. revenue-quarterly | Amazon.com, Inc. Quote

Ads are still a relatively small share of Amazon’s total revenue base compared with retail and AWS, meaning ample room to scale. That said, competition in CTV and DSP remains intense, and as Amazon ramps up, Trade Desk faces growing pressure to defend its share.

Second-quarter total revenues rose 20% year over year to $200.6 billion, while operating income increased 43% to $27.5 billion. AWS remains a powerful growth engine, with revenues rising 36.7% to $42.2 billion and operating income reaching $16.6 billion in the quarter. AMZN’s diversification across e-commerce, AWS/cloud, advertising and broad AI investments, with stupendous financial resources, gives it an edge and reduces reliance on one segment. As of June 30, 2026, cash and cash equivalents were $78.2 billion, while the long-term debt was $128.9 billion.

However, Amazon’s aggressive investment strategy carries risks. The company now expects approximately $220 billion in cash capital expenditures in 2026, largely reflecting investments tied to AI and AWS capacity expansion. Management acknowledged that the heavy data-center buildout will pressure free cash flow in the near term before those assets are fully monetized. Amazon also faces intense competition across digital advertising from Alphabet, Meta and other major platforms.

Share Performance & Valuation for TTD & AMZN

Year to date, TTD’s share price is down 60.5% while AMZN stock is up 7.6%.

Image Source: Zacks Investment Research

TTD’s shares are trading at a forward 12-month price/earnings ratio of 12.48X, lower than AMZN’s 21.99X.

Image Source: Zacks Investment Research

How Does the Zacks Consensus Estimate Compare for TTD & AMZN?

Analysts have revised their estimates downward for TTD’s bottom line for the current year in the past 60 days.     

Image Source: Zacks Investment Research

For AMZN, the estimates are up 46.4% for the current fiscal year in the same period.

Image Source: Zacks Investment Research

TTD or AMZN: Which Is a Smarter Pick?

While TTD carries a Zacks Rank #4 (Sell) at present, AMZN has a Zacks Rank #3 (Hold).

In terms of the Zacks Rank, AMZN appears to be a better pick now.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.