The Trade Desk Just Had Its Worst Day Ever. What Comes Next?

Source Motley_fool

Key Points

  • The independent advertising platform has seen growth slow.

  • A sudden transition in the CFO position has added further uncertainty.

  • Still, The Trade Desk remains the leader in its area and enjoys secular tailwinds.

  • 10 stocks we like better than The Trade Desk ›

The Trade Desk (NASDAQ: TTD) has long been viewed as one of the purest ways to invest in the growth of digital advertising outside the walled gardens of Google, Meta Platforms, and Amazon. But on Aug. 8, the stock suffered its steepest single-day decline in history, falling nearly 39% after posting quarterly results that rattled Wall Street.

For a company that had only just joined the S&P 500 in July, the collapse was dramatic. It also raises a simple but important question for long-term investors: What's next for the tech company?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

A confused looking person.

Image source: Getty Images.

Why did the stock fall so hard?

The Trade Desk has been a growth darling over the years, thanks to its consistent track record of exceeding its guidance. But things haven't been that smooth for the programmatic advertising company lately.

One thing to note is that growth has been decelerating recently. Revenue rose 19% year over year to $694 million in Q2 2025, but that growth rate marked a clear slowdown from prior periods. Management guided for at least $717 million in Q3 revenue, implying just 14% growth -- a sharp deceleration for a stock that has been used to meeting or exceeding investor expectations.

Several factors contributed to the slower growth. First, the company has been slow in transitioning toward its artificial intelligence (AI) platform, Kokai, which is essentially an execution issue. However, a bigger challenge lies ahead, stemming from an intensifying competitive environment.

For instance, Amazon is rapidly expanding its advertising business, leveraging its connected TV (CTV) and huge ecosystem. Unlike The Trade Desk, which positions itself as a neutral platform for advertisers, Amazon owns both the supply and the sales channels. That vertical integration gives it advantages in data and scale that many fear could erode The Trade Desk's moat.

It didn't help that the adtech company announced a significant management change during its earnings release, where longtime CFO Laura Schenkein will step down later this month and board member Alex Kayyal will step into the role. While Schenkein will stay on through year-end to support the transition, the timing unsettled the market. Investors often interpret a sudden CFO change during a challenging stretch as a signal of instability.

In short, The Trade Desk has a lot of work ahead of it to prove to investors that its current challenge is temporary, not structural.

Looking at the bigger picture

While short-term pain is real with higher execution risk, it is also worth zooming out to look at the longer-term picture.

To start, The Trade Desk remains the largest independent demand-side platform (DSP) globally, so its leadership remains intact, at least for now. The company's positioning as the "anti-walled garden" continues to resonate with advertisers who want transparency and control.

Secondly, its AI engine, Kokai, is gaining adoption (though not as fast as investors would like). The advancement of AI technology is an irreversible trend, so The Trade Desk's positioning remains the right direction forward.

Third and most importantly, it is riding some of the most significant secular tailwinds, such as retail media and CTV. Even if competition is fierce, these segments are growing far faster than the broader ad market, so there will be opportunity for more than one player to succeed.

In other words, the company's long-term thesis hasn't evaporated. The question is whether investors are willing to stomach near-term uncertainty as the company works on solving its problems.

What does it mean for investors?

The Trade Desk's collapse was painful, highlighting real risks in competition, execution, and valuation. However, the company remains at the heart of two of the most significant secular shifts in advertising: the migration to the open internet and the rise of retail media and connected TV.

For investors with a long-term horizon, this kind of sell-off is an opportunity. Still, they should not act until they have greater visibility on the turnaround. Instead, investors should monitor these areas as The Trade Desk addresses its challenges.

  • Next earnings call: Does management defend or reset guidance further?
  • CFO transition: Can Kayyal quickly establish himself and help the CEO regain investor trust?
  • Competition: How Amazon, Google, and streaming players like Netflix or Roku position themselves in CTV will be critical.

Only with a clear sign of improvement should investors make their next move.

Should you invest $1,000 in The Trade Desk right now?

Before you buy stock in The Trade Desk, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and The Trade Desk wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $650,499!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,072,543!*

Now, it’s worth noting Stock Advisor’s total average return is 1,045% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 18, 2025

Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Netflix, Roku, and The Trade Desk. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Bitcoin Dips to Two-Week Low Around $113K Ahead of Fed Jackson Hole EventBitcoin continued its downward trajectory on Wednesday, hitting a two-week low as investors trimmed their positions ahead of the Federal Reserve’s upcoming Jackson Hole symposium.
Author  Mitrade
8 Month 20 Day Wed
Bitcoin continued its downward trajectory on Wednesday, hitting a two-week low as investors trimmed their positions ahead of the Federal Reserve’s upcoming Jackson Hole symposium.
placeholder
UK Inflation Climbs to 3.8% in July, Approaching 4.0% PeakUK consumer price inflation edged up to 3.8% in July from 3.6% in June, slightly surpassing the consensus forecast of 3.7%, official figures showed Wednesday.
Author  Mitrade
8 Month 20 Day Wed
UK consumer price inflation edged up to 3.8% in July from 3.6% in June, slightly surpassing the consensus forecast of 3.7%, official figures showed Wednesday.
placeholder
OpenAI Introduces Lowest-Cost ChatGPT Subscription in India with UPI Payment OptionOn Tuesday, OpenAI introduced ChatGPT Go, its most affordable AI subscription tier, targeting the price-sensitive Indian market. Nick Turley, OpenAI’s Vice President and Head of ChatGPT, announced the launch via an X post, highlighting that users can pay through India’s Unified Payments Interface (UPI).
Author  Mitrade
8 Month 19 Day Tue
On Tuesday, OpenAI introduced ChatGPT Go, its most affordable AI subscription tier, targeting the price-sensitive Indian market. Nick Turley, OpenAI’s Vice President and Head of ChatGPT, announced the launch via an X post, highlighting that users can pay through India’s Unified Payments Interface (UPI).
placeholder
Small Caps and Value Stocks Lead Gains as S&P 500 AdvancesLast week, the S&P 500 continued its upward momentum despite notable shifts in market leadership.
Author  Mitrade
8 Month 19 Day Tue
Last week, the S&P 500 continued its upward momentum despite notable shifts in market leadership.
placeholder
Australian Consumer Confidence Hits 3-Year High on RBA Rate CutsAustralian consumer sentiment soared to its highest level in over three years in August, buoyed by recent Reserve Bank of Australia (RBA) rate cuts and easing cost-of-living pressures, according to a Westpac-Melbourne Institute survey released Tuesday.
Author  Mitrade
8 Month 19 Day Tue
Australian consumer sentiment soared to its highest level in over three years in August, buoyed by recent Reserve Bank of Australia (RBA) rate cuts and easing cost-of-living pressures, according to a Westpac-Melbourne Institute survey released Tuesday.
goTop
quote