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Why Trade Desk Stock Surged 14% Today

By Joe Tenebruso – Updated Apr 29, 2020 at 4:35PM

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Despite the economic carnage caused by the coronavirus pandemic, the digital ad market appears to be holding up relatively well.

What happened 

Shares of The Trade Desk (TTD -1.73%) climbed 14% on Wednesday, following an encouraging first-quarter performance by an ad industry titan.

So what

Alphabet (GOOGL -1.82%) (GOOG -1.98%), the parent company of Google, delivered solid Q1 results. The digital advertising giant's revenue rose 13% year over year, to $41 billion, despite challenges brought by the coronavirus pandemic. 

Moreover, comments by Alphabet CFO Ruth Porat during a conference call with analysts suggested that the digital ad market was holding up relatively well during the COVID-19 crisis. Porat said that although Alphabet saw an "abrupt" decline in ad revenue in March, it was seeing "early signs ... that users are returning to more commercial behavior."

Investors appear to be taking this news as a sign that The Trade Desk could also show stronger-than-expected results when it reports earnings in May. 

A person in a business suit drawing an upwardly sloping chart.

Shares of the Trade Desk rose sharply on Wednesday. Image source: Getty Images.

Now what 

Like Alphabet, The Trade Desk stands to benefit from the migration of ad spending to digital channels. By helping companies make better use of new ad formats (like mobile video, connected-TV, and in-app ads), The Trade Desk is boosting its customers' returns on their advertising investments. That's a valuable service in any market environment. And it makes The Trade Desk an intriguing long-term investment even after its recent gains.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and The Trade Desk. The Motley Fool has a disclosure policy.

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Stocks Mentioned

The Trade Desk Stock Quote
The Trade Desk
$59.75 (-1.73%) $-1.05
Alphabet Inc. Stock Quote
Alphabet Inc.
$95.65 (-1.82%) $-1.77
Alphabet Inc. Stock Quote
Alphabet Inc.
$96.15 (-1.98%) $-1.94

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