Warren Buffett likes to invest in winning stocks. The Trade Desk (TTD -4.76%) has certainly been a big winner. Shares of the advertising technology company have delivered a return of more than 19x over the last 10 years.

But Buffett has never added The Trade Desk to his Berkshire Hathaway (BRK.A 0.91%) (BRK.B 1.23%) portfolio. Wall Street analysts think highly of the stock, but whether the Oracle of Omaha has an opinion on The Trade Desk is a mystery. He's never even mentioned the company's name in passing.

So would Buffett buy The Trade Desk stock? 

Checking off the "outstanding" list

Buffett has stated in the past that he likes to invest in "outstanding companies with outstanding management." He even said that his favorite holding period for such stocks is "forever." The Trade Desk arguably meets Buffett's "outstanding" critieria.

The Trade Desk operates a platform that enables advertisers and advertising agencies to buy slots on digital media. It has been profitable since 2013. The company has a huge growth potential, driven largely by the ongoing shift to ad-supported streaming services.

Buffett likes businesses with strong moats. The Trade Desk's platform's competitive advantages include a level of detail in reporting that rivals don't match. Its Unified ID 2.0 (UID2) open standard to replace web browser cookies also gives the company a significant edge. 

Just how strong is The Trade Desk's moat? CEO Jeff Green noted in the company's fourth-quarter conference call that The Trade Desk grew 24% in Q4, while most of its big rivals had negative growth. In the third quarter, The Trade Desk delivered 31% growth. Its top competitors either reported negative growth or only single-digit percentage growth.

Speaking of Green, he exemplifies the "outstanding management" that Buffett seeks. Green co-founded The Trade Desk in 2009 and has led the company ever since. Ernst & Young named Green and his co-founder Dave Pickles "Entrepreneurs of the Year" in 2017.

What Buffett wouldn't like

There's a pretty good argument to be made that The Trade Desk is an outstanding company with outstanding management. However, Buffett almost certainly wouldn't like at least two things about The Trade Desk.

First, the legendary investor prioritizes exceptional capital allocation. He wrote to Berkshire Hathaway shareholders in 1992, "The best business to own is one that over an extended period can employ large amounts of incremental capital at very high rates of return."

A top way to measure how well a company allocates capital is the return on invested capital (ROIC) metric. The Trade Desk's ROIC over the last 12 months is only 4.8%, and its ROIC has declined quite a bit in recent years. Buffett probably wouldn't be impressed.

Second, The Trade Desk's valuation would likely be problematic. The company's shares currently trade at over 53 times expected earnings and 63 times free cash flow. Buffett isn't as much of a stickler on valuation as he was in his younger days. However, any stock he buys still must be available at a relatively attractive price. 

Could The Trade Desk become a Buffett stock?

I don't think we can rule out the possibility that The Trade Desk could become a part of Berkshire Hathaway's portfolio in the future. Even if Buffett himself didn't initiate a position in the stock, one of his investment managers potentially could. As a case in point, Berkshire owns shares of Nu Holdings, a fintech stock that has a lower ROIC and less attractive valuation than The Trade Desk does.

However, it's fair to say that it's unlikely that The Trade Desk will become a Buffett stock anytime soon. The legendary investor hasn't been using much of Berkshire's large cash stockpile to buy stocks lately. His longtime business partner Charlie Munger recently said that the reason why is "because there's nothing we can stand buying." 

Just because The Trade Desk isn't and might never be a Buffett stock doesn't mean that it can't be a big winner for you, though. There are plenty of other stocks that Buffett has passed up that made investors a lot of money over the long term. I suspect The Trade Desk will be one of them over the next decade and beyond.