TTD Slides 27% in the Past Month: Hold the Stock or Trim Losses?

The Trade Desk TTD, a prominent name in the digital ad tech space, has gotten off to a rough start in 2026. TTD has seen its stock price collapse 26.7% over the past month, an uncomfortable drawdown for a company viewed as one of ad tech’s leading players.

Price Performance

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However, the company is not alone in the downturn. The Zacks Internet Services industry is also down 4% over the same time frame, while the Zacks Computer & Technology sector and the S&P 500 composite have lost 2.9% and 0.9%, respectively.

Rivals like Amazon AMZN, PubMatic PUBM and Magnite MGNI have also registered double-digit losses over the past month, underscoring the widespread pressure across the digital advertising ecosystem.

As investors look ahead to 2026, the focus remains on TTD’s ability to continue durable growth, defend share against deep-pocketed rivals and translate secular CTV momentum into accelerating earnings leverage.

Given all these factors, let’s examine closely to understand what TTD’s slump represents for investors.

TTD’s Growth Tempered by Multiple Headwinds

TTD’s sell-off has primarily been due to a confluence of company-specific challenges, including rising costs and slowing revenue growth, along with macro volatility and intensifying competition.

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The company is focused on embedding AI across the portfolio, which will further raise capex and operational costs. Rising expenses coupled with investments could compress margins if revenue growth slows. In the last reported quarter, total operating costs (excluding stock-based compensation) surged 17% year over year to $457 million. Expenses soared due to continued investments in enhancing platform capabilities, particularly in platform operations.

Macro-driven ad spend caution is immensely concerning for a pure play ad tech stock like TTD. If macro headwinds worsen, revenue growth may face pressure due to reduced programmatic demand. Higher interest rates, geopolitical instability and uneven global growth continue to remian concerning.

Connected TV (“CTV”) is often cited as TTD’s strongest long-term tailwind, but this market is also increasingly becoming competitive. Amazon’s expanding DSP business is giving tough competition to TTD, especially in this space. Moreover, the competition from walled gardens like Meta Platforms, Apple, Google and Amazon dominate this space as they control their inventory and first-party user data, allowing for highly targeted ad campaigns. Even smaller players like Magnite and PubMatic are expanding their presence in CTV and retail media and competing for ad dollars.

Regulatory and privacy-related changes like the deprecation of cookies and tightening data-privacy laws like Europe’s GDPR also pose ongoing challenges.

Overreliance on North America for revenues is another concern. Though TTD is focusing on geographic expansion, executing well across disparate markets can be complex and risky.

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Despite these, TTD has several long-term catalysts, such as the rise of CTV, expanding retail media networks and the growing adoption of Kokai. Kokai, the company’s AI-powered platform, which is used by 85% clients as their default experience, is strengthening its competitive moat. The company highlighted that Kokai delivered (on average) 26% better cost per acquisition, 58% better cost per unique reach and a 94% better click-through rate compared with Solimar. Embedding AI to enhance Kokai bodes well.

Retail media’s acceleration is fueled by rising demand for measurable, lower-funnel outcomes. Retailers are embracing Trade Desk as a partner because the platform seamlessly integrates retail data with identity solutions like UID2, enabling precise targeting and attribution across the open Internet.

TTD’s OpenPath and OpenAds initiatives further strengthen its ecosystem by connecting advertisers directly to publishers, improving transparency and supply-chain efficiency.

The Trade Desk’s strategy revolves around the open Internet, which is where price discovery and competition exist. Management noted that average consumers spend about two-thirds of their online time on the open Internet, but advertisers allocate far less than that proportion of their budgets.

Given all these, analysts have kept their estimates unchanged over the past 60 days for 2025.

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TTD’s Valuation

TTD stock is trading at a price/book multiple of 5.03X compared with the industry’s 7.84X.

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AMZN, MGNI and PUBM trade at 5.47X, 2.01X and 1.23X, respectively.

What to Do With TTD Stock?

At present, TTD carries a Zacks Rank #4 (Sell).

Given the Zacks Rank, investors may be better served by trimming exposure or staying on the sidelines. New investors need to wait for a favorable entry point.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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