Why The Trade Desk Stock Rallied Today
Key Points
The Federal Trade Commission has filed suit against rival Amazon for deceptive ad pricing.
This could provide an opportunity for The Trade Desk to recapture share.
- 10 stocks we like better than The Trade Desk ›
Shares of The Trade Desk (NASDAQ: TTD) charged higher on Wednesday, surging as much as 5.2%. As of 12:31 p.m. ET, the stock was still up 4.7%.
The catalyst that sent the digital advertising stock higher was reports that a competitor's ad practices had attracted scrutiny from a government agency and a lawsuit.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: The Motley Fool.
Secret ad surcharges
Reports broke this week that 22 states were joining the Federal Trade Commission (FTC) in filing suit against Amazon (NASDAQ: AMZN), alleging deception ad practices. The FTC leveled charges that the e-commerce and cloud kingpin "secretly and systematically overcharged" advertisers by tacking on "undisclosed surcharges" and concealing the actual cost of its real-time ad auctions. The complaint further alleges that Amazon took these steps because it was "unhappy about how much revenue its advertising auctions were generating."
Amazon fired back in a blog post, calling the lawsuit "misguided" and stating that the FTC's claim "fundamentally misunderstands how advertisers operate."
What does this have to do with The Trade Desk?
The Trade Desk has long championed the "open internet" and touted the advantages advertisers gain from the company's transparent pricing. However, recent advances in artificial intelligence (AI) have caused a paradigm shift in digital advertising. Large competitors with "walled gardens" -- including Amazon, Meta Platforms, and Alphabet -- have integrated AI into their closed ecosystems, making it tougher for smaller rivals to compete.
By shining a light on what it alleges are Amazon's deceptive practices, advertisers may gain a whole new appreciation for The Trade Desk's transparent pricing. Moreover, if advertisers fear they are paying higher ad prices within the walled gardens, they're more likely to shift some of those ad dollars to an independent player like The Trade Desk.
The recent shift in internet behavior has weighed heavily on The Trade Desk, which has suffered decelerating growth for six consecutive quarters. Investors fear the worst may be yet to come, as the company hasn't yet found a way to stem the tide.
The Trade Desk's gains mark something of a relief rally, but it remains to be seen if the company can capitalize on the opportunity.
Should you buy stock 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 $435,803!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,577!*
Now, it’s worth noting Stock Advisor’s total average return is 966% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of September 2, 2026.
Danny Vena, CPA has positions in Alphabet, Amazon, Meta Platforms, and The Trade Desk. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, and The Trade Desk. The Motley Fool has a disclosure policy.
Recommended Articles
