Investors in The Trade Desk are confronting a harsh new reality. The once-celebrated advertising technology stock has plummeted 66% since the start of the year, ranking it among the worst performers in the entire S&P 500. This collapse is particularly jarring because the company’s third-quarter results actually exceeded market expectations. This disconnect raises critical questions: what is driving the sell-off, and has the stock finally found a bottom?
A Paradox of Performance: Strong Earnings Meet Steep Declines
The financial figures reported for Q3 2025 were objectively solid. The Trade Desk generated $739 million in revenue, an 18% year-over-year increase that surpassed analyst estimates by approximately $20 million. Earnings per share also edged past consensus, coming in at $0.45.
Yet, the market response was a wave of selling. Since the report was released on November 6, the share price has tumbled an additional 14%. The core issue is a dramatic deceleration in growth. During the same quarter a year ago, the company was expanding at a 27% clip; that rate has now fallen to 18%. For a technology stock traditionally commanding a premium valuation, this slowdown is a glaring red flag for investors.
Wall Street’s Verdict: Slashing Targets Amid Mounting Uncertainty
Analysts have moved swiftly to adjust their outlooks, reflecting heightened concern. D.A. Davidson cut its price target sharply from $80 to $54. Truist Securities reduced its expectation from $100 to $85. UBS provided a modest increase to $82 but concurrently criticized the company’s weak performance relative to advertising rivals like Meta.
Should investors sell immediately? Or is it worth buying The Trade Desk?
Despite the relentless downward pressure, the average analyst price target sits between $77 and $82—more than double the current trading level. However, the wide dispersion of these targets underscores a market grappling with profound uncertainty about the company’s future trajectory.
The Competitive Vise Tightens: Amazon and Google Flex Their Muscles
The fundamental challenge is an intensifying competitive landscape. Industry titans Amazon and Google are aggressively expanding their proprietary advertising ecosystems, steadily eroding The Trade Desk’s market share. The company’s much-touted AI platform, Kokai, launched to reignite growth, has so far failed to deliver on its promised impact.
The Trade Desk continues to forge ahead in the connected TV space, announcing partnerships with platforms like DIRECTV, OSN, and DAZN. Nevertheless, these deals appear insufficient to reverse the overarching growth trend. Management’s guidance for the fourth quarter calls for revenue of at least $840 million, signaling only a continuation of this more moderate pace of expansion.
A $500 Million Buyback: Strategic Vote of Confidence or Act of Desperation?
In a move framed as a demonstration of confidence, the company’s leadership announced a new $500 million share repurchase program. This action, however, leaves many shareholders questioning its rationale. Why commit substantial capital to buy back stock when the share price continues its relentless decline despite beating profit expectations? Having fallen nearly 74% from its 52-week high of $141.53, The Trade Desk is undeniably operating in crisis mode.
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