Shares of The Trade Desk are experiencing significant downward pressure, trading near 52-week lows amid a confluence of technical and fundamental challenges. Institutional investors are displaying mixed reactions as the advertising technology firm contends with its recent removal from a major index and intensifying competition from a tech behemoth.
Fundamental Threat: Amazon’s Expanding $69 Billion Ad Business
Beyond immediate technical factors, a substantial competitive threat is emerging. Amazon’s advertising business has achieved an annual revenue run rate of approximately $69 billion, a figure that surpasses prior estimates. This scale directly challenges the core business model of The Trade Desk.
While The Trade Desk champions the “open internet,” Amazon is capturing increasing shares of global digital ad spend through its closed ecosystem. The e-commerce giant is leveraging its proprietary customer data as a structural advantage, particularly within the Connected TV (CTV) advertising segment. Market analysts identify this as a growing risk factor, one that is increasingly reflected in The Trade Desk’s compressed valuation multiples.
Technical Pressure: Nasdaq-100 Delisting Triggers Forced Selling
The proximate cause for the stock’s weakness is a major index change. On December 22, The Trade Desk was removed from the Nasdaq-100 index, with companies like Western Digital and Seagate Technology taking its place. This exclusion forces exchange-traded funds (ETFs) and index funds—most notably the multi-billion dollar Invesco QQQ Trust—to unwind their holdings to minimize tracking error.
This structural selling pressure is exacerbated by typically thin trading volumes around the year-end period. The confluence of forced selling and reduced market liquidity has amplified price movements. Although The Trade Desk remains a leader in open internet advertising, the index exclusion has eliminated a key source of consistent institutional demand.
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Corporate Response: Cost-Cutting and a Conflicting Institutional Picture
In response to mounting pressures, The Trade Desk management has implemented strict cost-control measures. The company announced a workforce reduction affecting nearly 1% of its employees, or about 39 staff members. This restructuring signals preparation for what may be a challenging 2026.
The company’s third-quarter 2025 financial results, however, demonstrated underlying resilience:
* Revenue of $739 million, representing 18% year-over-year growth
* Adjusted EBITDA of $317 million, maintaining a healthy margin
* A new $500 million share repurchase program authorized to support the equity price
The institutional investor landscape reveals divergence. The Czech National Bank established a new position of roughly 113,000 shares, and Assenagon Asset Management more than doubled its stake. Conversely, growth-oriented investors like Zevenbergen Capital reduced their holdings by over 113,000 shares.
Analyst Outlook: Wedbush Lowers Price Target to $40
Reflecting a cautious stance, Wedbush Securities has reduced its price target on The Trade Desk to $40 while maintaining a “Neutral” rating. This adjustment underscores skepticism about the company’s ability to re-accelerate growth in the face of Amazon’s competition and the loss of index-driven investment flows.
The stock is now navigating a complex environment defined by technical selling pressure from the index deletion and fundamental concerns regarding market share erosion. A critical near-term focus will be whether the newly authorized $500 million buyback program can establish a price floor following the year-end turnover.
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