The Trade Desk Just Fell to a Multi-Year Low. Contrarian Investors Are Paying Attention.

The Trade Desk (NASDAQ: TTD) was once a hot growth stock, but it's declined nearly 70% over the past five years and is now trading near a multi-year low. Let's see why this adtech leader lost its luster -- and why it might be a good buying opportunity for contrarian investors.

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What does The Trade Desk do?

The Trade Desk operates the world's largest independent demand-side platform (DSP) for digital ads. DSPs sell advertising space for automated ads on desktop, mobile, and connected TV (CTV) platforms. They usually work with sell-side platforms (SSPs), which help publishers sell their ad inventory.

Big tech companies like Meta Platforms (NASDAQ: META) and Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google often bundle together DSPs, SSPs, and other adtech tools in their digital advertising platforms. However, they usually lock those advertisers and publishers into their own walled gardens of websites and apps. To break out of those ecosystems and reach the "open internet", advertisers often turn to independent DSPs.

To serve those customers, The Trade Desk offers Solimar, its unified platform for analyzing data, and Kokai, its AI-powered platform for planning, bidding, campaign optimization, and ad measurement tools. It's also been rolling out its Unified ID 2.0 (UID2) solution, which replaces traditional cookies on websites, and its new Ventura smart TV OS, which hosts its own ads. It's even bypassing SSPs with OpenPath, a platform that directly connects advertisers to publishers.

Why did The Trade Desk's stock decline?

From 2020 to 2025, its revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew at CAGRs of 28% and 33%, respectively. Most of that growth was driven by its CTV business, which profited from the growth of ad-supported streaming media services, rather than its slower-growing desktop and mobile platforms.

From 2025 to 2028, analysts expect The Trade Desk's revenue and adjusted EBITDA to both grow at CAGRs of 11% as its CTV business expands and Kokai locks in more clients with its sticky AI services. It's also reportedly in talks with OpenAI to sell ads in ChatGPT.

The Trade Desk is still growing at a healthy rate, but its gradual slowdown and near-term macro headwinds for the advertising market likely drove the bulls away. But with an enterprise value of $9.6 billion, it looks historically cheap at just 7 times this year's adjusted EBITDA.

That's why contrarian investors should pay close attention. If you expect The Trade Desk to continue pulling advertisers away from Meta and Google as it expands into a more diversified adtech company, its recent pullback could represent a great buying opportunity for patient investors.

Leo Sun has positions in Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy.