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Globe and Mail
7 days ago
- Business
- Globe and Mail
Why The Trade Desk Stock Tumbled Today
Key Points The Trade Desk's second-quarter results were in line with estimates. The walled gardens it's competing with appear to be getting stronger. Revenue growth is expected to decelerate in the third quarter. 10 stocks we like better than The Trade Desk › Shares of The Trade Desk (NASDAQ: TTD) were taking a dive for the second time in three earnings reports today. The leading independent demand-side platform (DSP) in adtech posted results that were in line with expectations, but its guidance confirmed that competition was becoming more of a threat to the business. As a result, several Wall Street analysts downgraded the stock this morning, and shares were down 38.1% as of 10:08 a.m. ET. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » The Trade Desk runs into a wall The second-quarter results weren't bad. Revenue rose 19% to $694 million, which topped the consensus at $686 million. The company touted progress in several channels, including connected TV, retail media, and supply chain optimization, and its Kokai AI platform is being adopted by its customers. On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 12% to $271 million, and adjusted earnings per share increased from $0.39 to $0.41, which matched estimates. The Trade Desk's results make it clear that its growth rate is slowing, which is a problem for a stock that has historically traded at a high multiple. Several analysts downgraded the stock on the update. Bank of America double-downgraded the stock to underperform, saying concerns about competitive pressures were justified. At least three other analysts also cut their ratings as it appears that the "walled gardens" that The Trade Desk competes with like Netflix, Amazon, Meta, and Alphabet are becoming stronger. What's next for The Trade Desk Looking ahead to the third quarter, the company called for revenue of at least $717 million and EBITDA of about $277 million, indicating margins are expected to fall slightly on a sequential basis. The revenue forecast, which compares to the average estimate at $722 million, implies growth of at least 14%, a clear sign that growth is decelerating. Given that, the sell-off looks justified as The Trade Desk now trades at a price-to-earnings ratio of 31 based on adjusted earnings, which seems like a fair price now that its growth prospects are in doubt. Should you invest $1,000 in The Trade Desk right now? Before you buy stock in The Trade Desk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and The Trade Desk wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Bank of America is an advertising partner of Motley Fool Money. Jeremy Bowman has positions in Amazon, Bank of America, Meta Platforms, Netflix, and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Netflix, and The Trade Desk. The Motley Fool has a disclosure policy.
Yahoo
7 days ago
- Business
- Yahoo
Why The Trade Desk Stock Tumbled Today
Key Points The Trade Desk's second-quarter results were in line with estimates. The walled gardens it's competing with appear to be getting stronger. Revenue growth is expected to decelerate in the third quarter. 10 stocks we like better than The Trade Desk › Shares of The Trade Desk (NASDAQ: TTD) were taking a dive for the second time in three earnings reports today. The leading independent demand-side platform (DSP) in adtech posted results that were in line with expectations, but its guidance confirmed that competition was becoming more of a threat to the business. As a result, several Wall Street analysts downgraded the stock this morning, and shares were down 38.1% as of 10:08 a.m. ET. The Trade Desk runs into a wall The second-quarter results weren't bad. Revenue rose 19% to $694 million, which topped the consensus at $686 million. The company touted progress in several channels, including connected TV, retail media, and supply chain optimization, and its Kokai AI platform is being adopted by its customers. On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 12% to $271 million, and adjusted earnings per share increased from $0.39 to $0.41, which matched estimates. The Trade Desk's results make it clear that its growth rate is slowing, which is a problem for a stock that has historically traded at a high multiple. Several analysts downgraded the stock on the update. Bank of America double-downgraded the stock to underperform, saying concerns about competitive pressures were justified. At least three other analysts also cut their ratings as it appears that the "walled gardens" that The Trade Desk competes with like Netflix, Amazon, Meta, and Alphabet are becoming stronger. What's next for The Trade Desk Looking ahead to the third quarter, the company called for revenue of at least $717 million and EBITDA of about $277 million, indicating margins are expected to fall slightly on a sequential basis. The revenue forecast, which compares to the average estimate at $722 million, implies growth of at least 14%, a clear sign that growth is decelerating. Given that, the sell-off looks justified as The Trade Desk now trades at a price-to-earnings ratio of 31 based on adjusted earnings, which seems like a fair price now that its growth prospects are in doubt. Should you invest $1,000 in The Trade Desk right now? Before you buy stock in The Trade Desk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and The Trade Desk wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Bank of America is an advertising partner of Motley Fool Money. Jeremy Bowman has positions in Amazon, Bank of America, Meta Platforms, Netflix, and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Netflix, and The Trade Desk. The Motley Fool has a disclosure policy. Why The Trade Desk Stock Tumbled Today was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
22-05-2025
- Business
- Yahoo
2 Nasdaq-100 Stocks I'd Buy Without Hesitation Right Now
After falling sharply on tariff concerns, the Nasdaq-100 has recovered nearly all of its losses. The Trade Desk has bounced back from an earlier misstep and could capitalize on the pressures on Google. AMD is seeing strong data center growth, and the stock looks cheap after falling from last year's peak. 10 stocks we like better than Advanced Micro Devices › The Nasdaq-100 plunged earlier this year following the Liberation Day tariffs, sinking into a bear market. Over the past few weeks, however, the index has come roaring back and now sits less than 5% below the peak it hit in February. While the economy still remains uncertain as trade negotiations play out and consumer sentiment has weakened substantially, there are several good buys in the index of the 100 most valuable Nasdaq stocks. Keep reading to see two Nasdaq-100 stocks I'd buy without hesitation. Share prices of The Trade Desk (NASDAQ: TTD) plunged earlier this year after the ad tech company missed its fourth-quarter guidance. Management was direct with investors about the miss, saying it was due to a few internal errors and delays, rather than competition or a structural change in the market. The company redeemed itself in its first-quarter earnings report, blowing past estimates. Revenue jumped 25% year over year to $616 million, ahead of estimates at $575.3 million. The Trade Desk has been a longtime outperformer on the stock market, and the company has several competitive advantages as the leading independent demand-side platform in ad tech. It's invested significantly in AI, and two-thirds of its customers are now using its Kokai AI platform, with the majority of its customer spend now going through Kokai. The technology has the power to look across roughly 17 million ad opportunities per second, and management believes it will be the most powerful buying platform the advertising industry has ever seen by the end of the year. The ad tech platform also appears to be in an advantageous position as pressure builds on Alphabet's Google, whose "walled garden" commands a large share of ad spend that demand-side platforms like The Trade Desk don't get to participate in. Google has been declared an illegal monopoly in U.S. District Court for both search and ad tech, and the company could face a significant fine, forced divestitures, or a breakup. A setback for Google should favor The Trade Desk. Over the long term, The Trade Desk seems well-positioned to take advantage of tailwinds in the digital advertising market and deliver strong growth. Even after the recent rebound, the stock is down 46%, offering plenty of room for recovery. Like The Trade Desk, Advanced Micro Devices (NASDAQ: AMD) is also trading down sharply from its peak. The stock was bid up significantly in the earlier stages of the AI boom. While AMD didn't live up to those expectations back then, the business is thriving now, and the stock is much cheaper. Revenue jumped 36% year over year in the first quarter to $7.44 billion, and importantly, its data center segment is taking off, driven in part by AI demand. In the first quarter, data center revenue jumped 57% to $3.7 billion, driven by growth of EPYC CPU and Instinct GPU chips. AMD's momentum also seems to be building in other areas. It signed a $10 billion collaboration deal with Humain, a Saudi Arabian AI company. It also acquired ZT Systems and sold off the infrastructure business, retaining its engineers, which should better position it to compete in the data center market, according to analysts, and Elon Musk said his XAi startup was planning to buy "a lot" of GPUs from AMD and Nvidia. In addition, AMD announced a $6 billion share repurchase authorization, showing it's prepared to take advantage of any discounts or sell-offs in the stock. After the pullback over the past year, AMD now trades at a forward P/E of under 30 based on adjusted earnings. For a company that's emerging as a clear winner from the AI boom, that looks like a great price. Before you buy stock in Advanced Micro Devices, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Advanced Micro Devices, Nvidia, and The Trade Desk. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Nvidia, and The Trade Desk. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy. 2 Nasdaq-100 Stocks I'd Buy Without Hesitation Right Now was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
23-03-2025
- Business
- Yahoo
Better AdTech Stock: AppLovin vs. The Trade Desk
With people constantly connected to media content, every click on a mobile app or view of a streaming video holds the potential to be monetized. This is the battleground of advertising technology (adtech), representing a total addressable market approaching $1 trillion. Companies like AppLovin (NASDAQ: APP) and The Trade Desk (NASDAQ: TTD) empower brands and publishers to capitalize on the interactions of their audiences. However, despite exceptional growth, shares of the two industry leaders have been highly volatile at the start of 2025 amid the broader stock market correction. AppLovin shares are down 45% from their 52-week high, while The Trade Desk stock is down by 53% year to date. Is it time to buy the dip, or should investors keep scrolling? Let's discuss which adtech titan is the better stock right now. AppLovin excels in mobile adtech, capturing strong demand from gaming app developers seeking to generate revenue from user activity. At the heart of this ecosystem is the AppLovin Exchange, which serves as a real-time bidding platform connecting app publishers with advertisers to buy and sell ad inventory at scale. The company's breakthrough has been its ability to integrate artificial intelligence (AI) tools through its AXON 2.0 engine, which sorts vast amounts of information to optimize ad placements and enhance conversions. For the year ended Dec. 31, 2024, advertising revenue surged by 75% year over year, showcasing the transformative impact of AI. More impressive was the shift in profitability as net income soared 343% compared to the prior year. For 2025, consensus estimates project revenue to grow by a solid 21% this year alongside an estimated 69% increase in earnings per share (EPS) to $7.65. A key strategy for AppLovin this year is to leverage its AXON AI engine and ad marketplace into new advertising verticals such as e-commerce and connected TV (CTV), which includes video streaming channels. The move marks a big jump for AppLovin as it attempts to diversify beyond gaming and goes head-to-head with The Trade Desk in key segments. Investors convinced AppLovin can replicate its mobile AI leadership in new advertising categories may see it as the top adtech stock. Unlike AppLovin's exchange, which supports app publishers in selling ad space, The Trade Desk focuses more on buyers -- including major brands like Coca-Cola, and advertising agencies such as Omnicom. By this measure, The Trade Desk's advantage is its scale and close relationship with these major enterprises, including partnerships with CTV companies like Walt Disney and Netflix, bolstering its competitive position. In 2024, The Trade Desk's revenue climbed by 26% while adjusted earnings per share (EPS) grew by a robust 32% compared to 2023. Yet, the results disappointed even loftier Wall Street estimates that expected a bit more from the company's Kokai AI initiative, adding to concerns that AppLovin's entry into the CTV market could pressure its long-held dominance in programmatic streaming ads. These factors help explain its sharp stock price sell-off. The silver lining is that The Trade Desk's valuation has also pulled back to a more compelling level. The stock is trading at 9 times the company's consensus 2025 revenue as a forward price-to-sales (P/S) ratio, notably well below AppLovin at closer to 17. Similarly, The Trade Desk's forward price-to-earnings (P/E) ratio of 30 represents a discount to AppLovin at 36. Investors who believe The Trade Desk has a superior technology platform in CTV advertising and that its recent stumble is temporary may think its stock offers better value. TTD PS Ratio (Forward) data by YCharts Choosing between AppLovin and The Trade Desk presents a challenge, as I believe both stocks are well-positioned to rebound and reward shareholders over the long run. That said, I'll give an edge to AppLovin as the better adtech stock right now given its stronger growth momentum, in what may still be the early stages of a global expansion opportunity. I predict AppLovin will outperform moving forward and could be a great option for investors within a diversified portfolio. Before you buy stock in AppLovin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AppLovin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $726,481!* Now, it's worth noting Stock Advisor's total average return is 835% — a market-crushing outperformance compared to 164% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 18, 2025 Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AppLovin, Netflix, The Trade Desk, and Walt Disney. The Motley Fool has a disclosure policy. Better AdTech Stock: AppLovin vs. The Trade Desk was originally published by The Motley Fool Sign in to access your portfolio
