Bold statement: The Trade Desk’s worst year isn’t the end of its story—it could be the setup for a thoughtful, long-term rebound if the odds align. But here’s where it gets controversial: the market’s fear that Amazon’s growing DSP could crush Trade Desk’s open-internet advantage isn’t something to ignore. Let’s unpack what happened in 2025, what it means for 2026, and how investors might think about the risk-reward balance.
The Trade Desk (TTD) endured a challenging 2025, slipping toward the bottom of the S&P 500 alongside Fiserv as one of the index’s poorest performers. Through December 9, the stock had fallen about 66.2% from its highs in the year. Such a drop can signal persistent, secular headwinds or simply present a window of opportunity depending on the catalyst and timing. Here’s a closer look.
Early-year signals suggested trouble. The company missed fourth-quarter 2024 revenue expectations in February, marking its first earnings miss in 33 quarters (roughly eight years) as a public company. Revenue still grew more than 22% in that quarter, but the momentum didn’t carry into 2025. With the full-year outlook, revenue was projected at about $2.89 billion, implying an 18.2% increase—an eight-percentage-point deceleration from 2024. Margins were expected to tighten as well, with adjusted earnings per share rising about 7.2% in 2025. While not catastrophic, the combination of elevated valuation and slowing growth left little room for error, especially given the stock traded around 71 times adjusted EPS at the start of the year.
What caused the softness? Several factors played a role, some within Trade Desk’s control and others outside it. As a demand-side programmatic advertising platform, Trade Desk faced a tougher comparison against a 2024 peak tied to election-year ad spending. Additionally, the company launched a rapid wave of product innovations—most notably Audience Unlimited, which uses generative AI-based recommendations for advertisers, plus advances in one-to-one advertiser-to-publisher deals like Deal Desk and OpenPath. This aggressive product cadence occurred alongside a notable amount of leadership turnover, including replacements for the CFO, COO, and Chief Revenue Officer since March. The departure of CFO Laura Schenkein during Q2 amplified concerns about execution and continuity.
These dynamics fed concerns that Trade Desk might be squeezed by larger, more diversified peers in the Magnificent Seven, all competing for a bigger slice of the digital-advertising pie. A key source of nervousness for investors has been the rise of Amazon as a potential challenger. Amazon has been strengthening its demand-side capabilities through high-profile connected-TV partnerships that leverage its own customer data from e-commerce, Prime Video, and Fire TV. There have been reports that Amazon has undercut Trade Desk on fees, with some estimates suggesting as low as 1% of ad spend on Amazon’s side versus Trade Desk’s typical 12%–15% range.
Does that doom Trade Desk? Not necessarily. CEO Jeff Green has argued that Amazon’s DSP activity is largely aimed at monetizing Amazon’s own inventory, with only a minority serving off-Amazon advertisers. In Green’s view, Trade Desk’s core value proposition—providing objective, open-internet measurement and access across a broader set of publishers—should pay off in the long run. The company is pursuing a longer-term project to standardize ad effectiveness across multiple formats and types of publishing, including journalism, live sports, and audio content. If successfully implemented, this could position Trade Desk as the preferred neutral intermediary for advertisers seeking transparency beyond the walled gardens.
There is still some fear in the near term that Amazon could erode Trade Desk’s share on the margins. However, the market appears to have priced in a portion of these concerns. The current valuation sits around 22.1 times this year’s adjusted EPS and about 18.9 times next year’s estimates, which is modestly cheaper than at the beginning of the year and closer to market norms. Additionally, management has intensified stock repurchases as the stock fell, which is helping to reduce the share count and could support earnings per share in a down year.
What’s the takeaway for 2026? The risk-reward setup looks more balanced than it did earlier in 2025. If Trade Desk can sustain improved execution, bring new products to market effectively, and demonstrate meaningful growth in revenue and margins despite a tougher ad-spend backdrop, the stock could stage a rebound. If, on the other hand, the competitive pressure from Amazon and other incumbents intensifies and the company cannot translate its innovations into durable earnings growth, there could be additional downside in the near term.
Key questions to consider:
- Will Trade Desk’s open-internet strategy continue to differentiate it from Amazon and other large-tech platforms enough to drive sustained growth?
- How quickly can Audience Unlimited and related innovations translate into measurable incremental demand and margin improvements?
- Is the current valuation sufficiently attractive to compensate for ongoing execution risk, or should investors wait for clearer signs of top-line acceleration?
What’s your view? Do you expect Trade Desk to overcome near-term headwinds and deliver a meaningful rebound, or do you think Amazon’s DSP expansion poses a meaningful long-term threat? Share your perspective in the comments.
