The Trade Desk Faces Growth Challenges Amid AI Partnership Rumors
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy TTD?
Source: Fool
- Slowing Growth: The Trade Desk's stock has fallen 37% this year, following a staggering 68% crash in 2025, indicating a persistent decline in its growth rate, which raises investor concerns about its long-term prospects amid increasing competition and potential AI disruptions.
- Partnership Potential: Rumors suggest that The Trade Desk is in talks with OpenAI for a partnership, which could present significant growth opportunities, particularly with other AI companies, although this collaboration may be temporary as OpenAI develops its own adtech capabilities.
- Profitability Pressure: While OpenAI's ChatGPT is immensely popular, it needs to demonstrate profitability, with ad sales being crucial for its path to profitability, presenting a potential revenue source for The Trade Desk, though insufficient to classify its stock as a strong buy.
- Market Risks: Despite the potential revenue from a partnership with OpenAI, The Trade Desk's growth rate has been declining in recent quarters, and without a convincing catalyst, investors are cautious about purchasing its stock amid rising competition.
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Analyst Views on TTD
Wall Street analysts forecast TTD stock price to rise
28 Analyst Rating
15 Buy
12 Hold
1 Sell
Moderate Buy
Current: 21.280
Low
38.00
Averages
53.33
High
85.00
Current: 21.280
Low
38.00
Averages
53.33
High
85.00
About TTD
The Trade Desk, Inc. is a global advertising technology company. The Company offers a self-service, cloud-based ad-buying platform that empowers its clients to plan, manage, optimize and measure more expressive data-driven digital advertising campaigns. Its platform allows clients to execute integrated campaigns across ad formats and channels, including connected television (CTV) and other video, display, audio, and native, on a multitude of devices, such as televisions, streaming devices, mobile devices, computers and digital-out-of-home devices. Its platform’s integrations with inventory, publisher and data partners provide ad buyers reach and decisioning capabilities, and its enterprise application programming interfaces (APIs) enable its clients to customize and expand platform functionality. Its platform provides auto-optimization features that allow buyers to automate their campaigns and support them with computer-generated modeling and decision-making.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Iran War's Impact on Markets and Oil Prices
- Market Shock from War: Since the outbreak of the Iran war on February 28, West Texas Intermediate (WTI) crude oil prices have surged by 48.67% to $99.64 per barrel, raising inflation concerns and exposing investors to a potential 20% market decline risk.
- Rising Treasury Yields: The 10-year and 30-year Treasury yields are climbing due to war-driven inflation expectations, impacting borrowing costs and exacerbating investor panic, particularly for long-term investors facing a challenging environment.
- Tech Sector Turmoil: Amid market volatility, tech stocks, especially the 'Magnificent Seven', have faced significant declines, with Intuit, Applovin, and Gartner dropping 37%, 43.4%, and 38% respectively, highlighting the sector's vulnerability to changing market sentiments and AI competition.
- Shift in Investor Sentiment: As uncertainty looms over the market's future, investors feel increasingly helpless, with many opting to exit, particularly in light of the potential for rising oil prices, leading to a substantial loss of confidence in equities.
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Analysis of The Trade Desk's Potential Stock Recovery
- Value Investment Opportunity: The Trade Desk's current stock price of $21.73 and a market cap of $10 billion indicate it is trading significantly below its intrinsic value, with analysts suggesting it could potentially double by year-end, highlighting its undervalued status.
- Reasons for Growth Slowdown: Once a darling of growth stocks with quarterly revenue growth exceeding 20%, The Trade Desk has seen a slowdown due to platform complexity and negative audits from Publicis, leading to diminished investor confidence.
- Future Growth Expectations: Revenue is expected to grow 14% year-over-year in Q4 2025, with a forecast of 10% growth in the next quarter; while this is below historical levels, a return to mid-teens growth could see the stock price rebound.
- Strategic Adjustments Needed: The Trade Desk must address its relationship issues with Publicis and expedite its collaboration with OpenAI to capture market share in generative AI advertising, which is essential for achieving its goal of doubling the stock price.
See More
The Trade Desk Faces Growth Challenges Amid Market Shifts
- Growth Slowdown: The Trade Desk's revenue growth was only 14% year-over-year in Q4 2025, with expectations of a further decline to 10% next quarter, a stark contrast to its previous growth rates exceeding 20%, leading to diminished investor confidence.
- Client Relationship Crisis: The decision by Publicis to no longer recommend The Trade Desk as an advertising partner highlights a trust crisis following a failed internal audit, which could further impact its market share and customer base.
- Valuation Struggles: The Trade Desk trades at a forward P/E of 10.8, significantly lower than the S&P 500's 20.6, indicating that despite its growth being on par with market averages, its valuation does not reflect its potential value, limiting stock price appreciation.
- Uncertain Future Outlook: While the partnership with OpenAI could drive advertising growth, the stock's potential to double remains uncertain until the company addresses the allegations from Publicis and improves its customer relationships.
See More
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- Customer Base Expansion: The number of Braze's customers grew by 14% to 2,609, with those generating annual recurring revenue (ARR) of at least $500,000 increasing by 35% to 333, indicating the company's growing appeal among high-value clients.
- Surge in Operating Income: Adjusted operating income soared by 83% to $14.5 million, reflecting effective management in cost control and revenue growth, further solidifying its market position.
- Optimistic Future Outlook: Management expects revenue for fiscal 2027 to rise to between $884 million and $889 million, up from $738 million in fiscal 2026, while adjusted operating income is projected to reach $69 million to $73 million, showcasing strong commercial momentum and the fastest product delivery pace in the company's history.
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- Significant Revenue Growth: Braze reported a 28% year-over-year revenue increase to $205 million in Q4 of fiscal 2026, primarily driven by new business wins and upsells to existing clients, thereby enhancing its market position.
- Expanded Customer Base: The company's customer count grew by 14% to 2,609, with those generating annual recurring revenue (ARR) of at least $500,000 rising by 35% to 333, indicating strong appeal among high-value clients.
- Surge in Operating Income: Adjusted operating income soared by 83% to $14.5 million, with management projecting revenue growth to between $884 million and $889 million in fiscal 2027, reflecting robust commercial momentum and future growth potential.
- Strategic Partnerships: Recent expansions with data analytics leader Snowflake, e-commerce giant Shopify, and digital ad platform The Trade Desk are expected to further fuel Braze's growth, with the CEO noting the fastest pace of new product delivery in the company's history.
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- Executive Appointment: Trade Desk announced the appointment of Drew Voller, the CFO of Reddit, as its new CFO, aiming to enhance the company's financial management and strategic planning capabilities, which is expected to boost its competitiveness in the digital advertising sector.
- Financial Background: During his tenure at Reddit, Drew Voller successfully improved the company's financial transparency and profitability, and Trade Desk hopes to leverage his experience in optimizing its financial structure in his new role.
- Market Reaction: The market responded positively to this appointment, with analysts believing that Voller's addition will help Trade Desk better navigate challenges in the rapidly evolving ad tech industry, thereby enhancing investor confidence.
- Strategic Significance: This appointment reflects Trade Desk's emphasis on diversifying and professionalizing its executive team, aiming to drive long-term growth and innovation by bringing in leaders with extensive experience.
See More
Iran War's Impact on Markets and Oil Prices
- Market Shock from War: Since the outbreak of the Iran war on February 28, West Texas Intermediate (WTI) crude oil prices have surged by 48.67% to $99.64 per barrel, raising inflation concerns and exposing investors to a potential 20% market decline risk.
- Rising Treasury Yields: The 10-year and 30-year Treasury yields are climbing due to war-driven inflation expectations, impacting borrowing costs and exacerbating investor panic, particularly for long-term investors facing a challenging environment.
- Tech Sector Turmoil: Amid market volatility, tech stocks, especially the 'Magnificent Seven', have faced significant declines, with Intuit, Applovin, and Gartner dropping 37%, 43.4%, and 38% respectively, highlighting the sector's vulnerability to changing market sentiments and AI competition.
- Shift in Investor Sentiment: As uncertainty looms over the market's future, investors feel increasingly helpless, with many opting to exit, particularly in light of the potential for rising oil prices, leading to a substantial loss of confidence in equities.
See More
Analysis of The Trade Desk's Potential Stock Recovery
- Value Investment Opportunity: The Trade Desk's current stock price of $21.73 and a market cap of $10 billion indicate it is trading significantly below its intrinsic value, with analysts suggesting it could potentially double by year-end, highlighting its undervalued status.
- Reasons for Growth Slowdown: Once a darling of growth stocks with quarterly revenue growth exceeding 20%, The Trade Desk has seen a slowdown due to platform complexity and negative audits from Publicis, leading to diminished investor confidence.
- Future Growth Expectations: Revenue is expected to grow 14% year-over-year in Q4 2025, with a forecast of 10% growth in the next quarter; while this is below historical levels, a return to mid-teens growth could see the stock price rebound.
- Strategic Adjustments Needed: The Trade Desk must address its relationship issues with Publicis and expedite its collaboration with OpenAI to capture market share in generative AI advertising, which is essential for achieving its goal of doubling the stock price.
See More
The Trade Desk Faces Growth Challenges Amid Market Shifts
- Growth Slowdown: The Trade Desk's revenue growth was only 14% year-over-year in Q4 2025, with expectations of a further decline to 10% next quarter, a stark contrast to its previous growth rates exceeding 20%, leading to diminished investor confidence.
- Client Relationship Crisis: The decision by Publicis to no longer recommend The Trade Desk as an advertising partner highlights a trust crisis following a failed internal audit, which could further impact its market share and customer base.
- Valuation Struggles: The Trade Desk trades at a forward P/E of 10.8, significantly lower than the S&P 500's 20.6, indicating that despite its growth being on par with market averages, its valuation does not reflect its potential value, limiting stock price appreciation.
- Uncertain Future Outlook: While the partnership with OpenAI could drive advertising growth, the stock's potential to double remains uncertain until the company addresses the allegations from Publicis and improves its customer relationships.
See More
Braze Shares Surge After Strong AI-Driven Growth Metrics
- Significant Revenue Growth: Braze reported a 28% year-over-year revenue increase to $205 million in its fiscal 2026 Q4, driven by new customer acquisitions and upsells, thereby enhancing its competitive edge in the AI-driven market.
- Customer Base Expansion: The number of Braze's customers grew by 14% to 2,609, with those generating annual recurring revenue (ARR) of at least $500,000 increasing by 35% to 333, indicating the company's growing appeal among high-value clients.
- Surge in Operating Income: Adjusted operating income soared by 83% to $14.5 million, reflecting effective management in cost control and revenue growth, further solidifying its market position.
- Optimistic Future Outlook: Management expects revenue for fiscal 2027 to rise to between $884 million and $889 million, up from $738 million in fiscal 2026, while adjusted operating income is projected to reach $69 million to $73 million, showcasing strong commercial momentum and the fastest product delivery pace in the company's history.
See More
Braze Reports Strong Growth Driven by AI Marketing Tools
- Significant Revenue Growth: Braze reported a 28% year-over-year revenue increase to $205 million in Q4 of fiscal 2026, primarily driven by new business wins and upsells to existing clients, thereby enhancing its market position.
- Expanded Customer Base: The company's customer count grew by 14% to 2,609, with those generating annual recurring revenue (ARR) of at least $500,000 rising by 35% to 333, indicating strong appeal among high-value clients.
- Surge in Operating Income: Adjusted operating income soared by 83% to $14.5 million, with management projecting revenue growth to between $884 million and $889 million in fiscal 2027, reflecting robust commercial momentum and future growth potential.
- Strategic Partnerships: Recent expansions with data analytics leader Snowflake, e-commerce giant Shopify, and digital ad platform The Trade Desk are expected to further fuel Braze's growth, with the CEO noting the fastest pace of new product delivery in the company's history.
See More
Trade Desk Appoints Reddit CFO Drew Voller
- Executive Appointment: Trade Desk announced the appointment of Drew Voller, the CFO of Reddit, as its new CFO, aiming to enhance the company's financial management and strategic planning capabilities, which is expected to boost its competitiveness in the digital advertising sector.
- Financial Background: During his tenure at Reddit, Drew Voller successfully improved the company's financial transparency and profitability, and Trade Desk hopes to leverage his experience in optimizing its financial structure in his new role.
- Market Reaction: The market responded positively to this appointment, with analysts believing that Voller's addition will help Trade Desk better navigate challenges in the rapidly evolving ad tech industry, thereby enhancing investor confidence.
- Strategic Significance: This appointment reflects Trade Desk's emphasis on diversifying and professionalizing its executive team, aiming to drive long-term growth and innovation by bringing in leaders with extensive experience.
See More
