While numerous technology stocks face headwinds, The Trade Desk is demonstrating the future of digital advertising through its groundbreaking Kokai artificial intelligence platform. An impressive 85% of the company’s client base has already adopted this new AI-driven technology, reporting exceptional outcomes. The critical question for investors is whether this advertising technology specialist can leverage these innovations to reverse its recent downward trajectory.
Robust Financial Performance and Growth Drivers
The company’s third-quarter 2025 results revealed substantial momentum, with revenue reaching $739 million – an 18% year-over-year increase. Excluding political advertising expenditures, growth accelerated to 22%. Connected Television continues to be the dominant growth engine, representing approximately half of total business volume. International markets are expanding at an even faster pace than the United States, highlighting the global scalability of The Trade Desk’s offerings.
Revolutionary AI Capabilities Reshaping Advertising Efficiency
The performance metrics for the Kokai AI platform present a compelling case for its adoption. Compared to previous technology, Kokai delivers 26% improved cost per acquisition, reduces reach costs by 58%, and achieves a remarkable 94% enhancement in click-through rates. Chief Executive Jeff Green emphasized that “our product innovations are helping leading global brands maximize the potential of data-driven advertising.” The platform’s decentralized AI architecture decomposes each function into separate specialized models, spanning from impression valuation to campaign performance prediction.
Market Analysts Revise Expectations Upward
Financial analysts have responded positively to the quarterly results, upgrading their 2026 projections to anticipate 20% revenue growth and 27% earnings per share expansion. The consensus price target currently stands at $67.44, with estimates ranging from $34.00 to $135.00, reflecting diverse valuation perspectives across the analyst community.
Should investors sell immediately? Or is it worth buying The Trade Desk?
Management has demonstrated confidence in the company’s prospects through an expanded $500 million share repurchase authorization. With $1.4 billion in cash reserves and no debt, The Trade Desk maintains a strong balance sheet position to capitalize on the ongoing digital advertising transformation.
Strategic Positioning in the Evolving Digital Landscape
The company’s commitment to the open internet, rather than closed ecosystems like those operated by Amazon or Google, represents a strategic differentiator. This neutral positioning and transparent approach may prove advantageous as advertisers increasingly seek alternatives to “walled garden” platforms.
Looking ahead, The Trade Desk has additional growth catalysts in development, including new AI tools such as Audience Unlimited and Koa Adaptive Trading Modes, which are scheduled for broader availability in 2026. The fundamental strength demonstrated through these innovations now faces the test of whether it can overcome the current technical downtrend in the company’s share performance.
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