Following a dismal start to the year for The Trade Desk (TTD -0.63%), shareholders are hoping the second half of 2025 reprograms the narrative. The stock is down 47% from its 52-week-high amid the broader market turbulence, even as the advertising technology (adtech) pioneer continues to generate impressive growth.
This recent weakness could be a buying opportunity for investors as The Trade Desk's long-term outlook remains as strong as ever. The company's effort to integrate more artificial intelligence (AI) technology is positioning it to capture a larger share of an estimated $1 trillion advertising market.
Here are three reasons why The Trade Desk stock could stage a big comeback.
Image source: Getty Images.
1. Adtech AI leadership
With people increasingly connected to media content, every digital interaction holds the potential to be monetized. The Trade Desk is capitalizing on this evolving industry landscape through its leading demand-side platform (DSP) that empowers advertisers to manage data-driven advertising campaigns across various formats and devices, including mobile devices and connected TVs (CTV).
By processing over 13 million impressions per second, the AI-driven Kokai ecosystem allows ad buyers to target audiences, leveraging real-time data to optimize ad spend based on consumer behavior patterns, identifying high-value marketing opportunities. The ease of use and system effectiveness have made The Trade Desk a go-to solution for major brands and agencies.
While CTV remains a high-growth market, with streaming video services offering more ad-funded options, Trade Desk is also expanding into new verticals, including retail media. The ability to leverage its AI capabilities with first-party data has positioned The Trade Desk as a leader in delivering innovative, high-impact advertising solutions.
2. A strong start to 2025
In the first quarter, The Trade Desk reported revenue of $616 million, a 25% year-over-year increase, well above the Wall Street estimate of $574 million. Its $0.33 in adjusted earnings per share (EPS) was 27% higher than the prior-year quarter, also beating expectations.
The Trade Desk founder and CEO Jeff Green called the new AI tools and features a "game changer" for advertising performance metrics, suggesting the company is just getting started with broad-based operating momentum and growth across all geographies and channels.
The result helped brush aside concerns raised after a rare fourth-quarter earnings miss, blamed on some setbacks as the company upgraded its CTV interface technology, which led to the stock's poor performance from its highs in 2024.
Despite those stumbling blocks, The Trade Desk is poised for robust growth and increasing profitability. For 2025, Wall Street analysts project a 17% revenue increase and a 6% rise in earnings per share (EPS). Expectations are for even stronger trends next year, with anticipated revenue growth of 18.3% and EPS growth of 20.5%.
Company fundamentals are further supported by a solid balance sheet with $1.7 billion in cash against zero financial debt. A resilient macroeconomic environment should be supportive for advertising demand as a tailwind for The Trade Desk stock through the second half of the year.
| Metric | 2025 Estimate | 2026 Estimate |
|---|---|---|
| Revenue (in billions) | $2.86 | $3.39 |
| Revenue growth (YOY) | 17% | 18.3% |
| Earnings per share (EPS) | $1.76 | $2.12 |
| EPS growth (YOY) | 6% | 20.5% |
Data source: Yahoo Finance. YOY = year-over-year.
3. A compelling post-sell-off valuation
The silver lining to the plunge in shares of The Trade Desk since the start of the year is that its valuation has been reset to a more reasonable level. The stock is trading at 42 times its consensus 2025 EPS as a forward price-to-earnings (P/E) ratio, well below the earnings multiple that averaged nearly 200 in 2024. The valuation looks even more compelling into 2026, with a one-year forward P/E ratio down to 35.
This shift reflects the company's expanding scale, alongside a more efficient cost structure, generating more sustainable, profitable growth. Now could be an ideal time for investors to buy shares of The Trade Desk, a leader that's well-positioned to exceed a lowered bar of expectations as it expands into new international markets and broadens its adtech reach.
TTD PE Ratio data by YCharts
Is The Trade Desk a buy?
I predict The Trade Desk stock can rebound sharply as upcoming quarterly results confirm both its operational excellence and financial strength. For investors seeking exposure to high-level themes in AI and next-generation advertising technology, this stock represents an excellent choice for diversified portfolios.
