The tech sector is a good place to look if you want to invest in growth stocks. After all, this industry produced the likes of Amazon and Facebook parent Meta Platforms.

So digital advertising provider The Trade Desk (TTD 1.41%) may seem like a good investment given its years of double-digit revenue growth. But the current macroeconomic environment of high inflation and rising interest rates adds an important wrinkle into the investment decision.

Advertising is among the sectors hurt by these macroeconomic conditions. Consequently, through April, the industry suffered 10 consecutive months of declines in ad spending.

So is The Trade Desk stock one to avoid for now? Despite the advertising slowdown, reasons exist to consider an investment in this ad tech company. Here's a look at factors to weigh when evaluating The Trade Desk as a potential growth stock investment.

The Trade Desk's performance amid tough conditions

One common hallmark of a growth stock is rising revenue, and amid a challenging advertising environment in 2022, The Trade Desk nonetheless delivered 32% year-over-year revenue growth, reaching $1.6 billion.

This growth was over three times higher than that experienced by the ad industry, which saw 2022 worldwide digital ad spending increase by 8.6% year over year.

And contrast The Trade Desk's 32% sales jump last year to the 1% year-over-year revenue decline experienced by Meta Platforms, one of the largest digital advertising companies. 2022 certainly proved a successful year of continued revenue growth for The Trade Desk.

That success extended into 2023. In the first quarter, the company achieved sales of $383 million, a 21% year-over-year increase.

And in the second quarter, The Trade Desk expects to make at least $452 million. That's a 20% increase from last year's $377 million.

How The Trade Desk delivered growth

The Trade Desk's ability to maintain double-digit revenue growth despite tough macroeconomic conditions is a testament to the strength of its ad tech platform. This platform has delivered a number of capabilities that keep advertisers coming back, allowing the company to maintain a retention rate of more than 95% over the past nine years.

The platform allows advertisers to efficiently run and manage digital ads across a slew of different media types, such as display, video, audio, and social ads, and across a variety of channels including mobile devices and internet-connected TVs (CTV). This is done through the automation of ad buying, including the use of artificial intelligence to make recommendations.

CTV in particular has been a key revenue driver for The Trade Desk as advertisers increasingly shift spending from traditional linear TV to CTV, thanks in part to the explosion of video streaming services in recent years.

Forecasts estimate linear TV ad spending will decline from $66.6 billion in 2022 to $56.8 billion in 2027 as those dollars shift to CTV, which is expected to rise from $20.7 billion to $40.9 billion over the same timeframe.

Consequently, CTV is the largest and fastest-growing channel for The Trade Desk. Moreover, the company sees CTV continuing in this capacity for the foreseeable future.

The Trade Desk's other factors to consider

Although the advertising sector saw ad spending declines over 2022 and into 2023, this situation is temporary. Despite the current slowdown, the global digital ad industry is still expected to reach nearly $627 billion in ad spending this year, up over 10% from 2022. In fact, double-digit growth is estimated to continue for the industry through 2025, hitting $766 billion.

This increase in digital ads, and CTV in particular, serves as a tailwind for The Trade Desk's continued revenue growth. But it's not just rising revenue that makes the company an attractive investment.

Some high-growth tech firms aren't profitable, reinvesting income into continued expansion. However, The Trade Desk has remained profitable since 2013. The company exited 2022 with $53 million in net income, and $9 million in Q1.

Its balance sheet is also solid. At the end of Q1, total assets were $4 billion, compared to $2 billion in total liabilities and no debt.

Given its strong revenue growth, solid financials, and the number of factors in the company's favor, The Trade Desk is a worthwhile growth stock to buy.