Amazon Just Partnered With Netflix -- Here's What It Means for The Trade Desk Stock

Key Points

• Amazon is consolidating premium CTV supply, making it even more dominant in this area.

• The Trade Desk faces increasing competitive pressure, but it could also be an opportunity.

• Advertisers that don’t want to depend solely on Amazon may rely more on The Trade Desk.

• 10 stocks we like better than The Trade Desk ›

The streaming ad wars just escalated. Amazon Ads and Netflix recently announced a partnership that will make Netflix's ad-supported inventory available programmatically through Amazon's demand-side platform (DSP) in more than a dozen major markets, including the U.S., U.K., Germany, Japan, and Brazil. For advertisers, this means one of the most premium sources of connected TV (CTV) inventory is now tied directly into Amazon's advertising ecosystem.

For The Trade Desk (NASDAQ: TTD), the independent DSP that has long positioned itself as the alternative to walled gardens like Google and Meta Platforms, the move raises both risks and opportunities.

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Why Netflix Chose Amazon

Netflix has quickly grown its ad-supported tier, reaching more than 90 million global monthly active users across all ad-tier households. To fully monetize that audience, Netflix needs scale, targeting, and attribution tools that resonate with global advertisers.

Amazon brings exactly that strength. Its DSP is one of the largest in the world, fueled by first-party shopping and streaming data from Amazon.com, Prime Video, and Fire TV. For brands, that means they can target Netflix viewers with the same precision they already use across Amazon's ecosystem, while tying exposure directly to purchase behavior.

Operationally, Amazon gives Netflix plug-and-play infrastructure. It also leverages advanced artificial intelligence (AI) to help advertisers run impactful digital ads campaigns with minimal effort, thanks to the automation of campaign planning, buying, and measurement. So, advertisers already allocating billions through Amazon Ads can now extend those campaigns onto Netflix inventory with minimal friction.

In short, partnering with Amazon should help Netflix quickly scale its advertising business.

What it means for The Trade Desk

Here's where the tension lies. The Trade Desk has also promoted partnerships with Netflix, Walt Disney, and Roku on curated supply access. Its pitch to advertisers is neutrality: unlike Amazon, it doesn't own content or compete in streaming, which helps ensure cross-platform transparency and measurement.

But Amazon's new Netflix deal strengthens its hand. With Netflix, Roku, and Disney inventory increasingly accessible through Amazon's DSP, The Trade Desk risks losing some of the premium authenticated CTV supply that has been central to its growth story.

Besides, Amazon has a closed-loop ecosystem that includes e-commerce, CTV hardware, and Prime Video, providing it with unmatched data for precise audience targeting. Combined with the consumer data from Netflix, it could deliver excellent return on advertising capital, rivaling (if not surpassing) that of The Trade Desk's platform.

The silver lining is that advertisers wary of Amazon's dominance may lean harder on The Trade Desk as a balancing force. Many global brands prefer to diversify demand across independent platforms rather than concentrate entirely inside one ecosystem. That gives the tech company a continued role, even if Amazon is now the more dominant gatekeeper for premium inventory.

The bigger picture

This partnership isn't just about Netflix. Amazon has been steadily expanding its CTV footprint:

• Roku: Earlier this year, Amazon Ads struck a deal to make Roku's authenticated inventory available on its DSP, covering more than 80 million U.S. households.
• Disney: Amazon has also partnered with Walt Disney's DRAX exchange, giving buyers access to premium Disney streaming content.

Together, these moves show Amazon's ambition to consolidate premium CTV supply into its advertising stack. For advertisers, this provides an additional option beyond existing DSPs for capital allocation. For publishers, it offers additional demand for their advertising industry. But for independent players like The Trade Desk, it raises the bar for them to remain competitive over the long term.

What does it mean for investors?

For investors, the Amazon-Netflix tie-up highlights a clear industry trend: Premium streaming inventory is becoming increasingly tied to large ecosystems with first-party data advantages. The Trade Desk still has unique strengths in neutrality, transparency, and cross-channel reach, but the competitive bar just moved higher.

If advertisers increasingly default to Amazon for CTV, The Trade Desk could face headwinds in maintaining its share of wallet. On the other hand, if buyers push back against platform dependency, The Trade Desk's neutrality could prove more valuable than ever.

Either way, the stakes in CTV just got higher. For investors in The Trade Desk, this isn't a reason to panic -- but it is a reason to keep a closer eye on how the competitive dynamics evolve.

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