Shares of advertising software maker The Trade Desk (NASDAQ:TTD) fell 39% in the morning session after the company released its second-quarter earnings report, which, despite beating revenue expectations, was overshadowed by in-line third-quarter guidance and the announcement of a CFO departure. Further,. CEO Jeff Green said that “from a macro standpoint, some of the world’s largest brands are absolutely facing pressure and some amount of uncertainty”. This added more uncertainty to the near-term performance of TTD.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy The Trade Desk? Access our full analysis report here, it’s free.
The Trade Desk’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for The Trade Desk and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 3.7% on the news that an analyst at BTIG reaffirmed a ‘Buy’ rating and raised the price target on the stock. BTIG analyst Clark Lampen lifted the firm’s price target to $97 from $79, citing a stabilized or improved digital advertising market. The analyst noted that adoption of the company’s Kokai platform, along with better representative engagement, drove market share gains for the ad-tech firm. The positive move also occurred amid a broader rally in software stocks. A weaker-than-expected jobs report increased market expectations for a Federal Reserve interest rate cut, a development that generally boosted valuations for growth sectors like technology.
The Trade Desk is down 53.4% since the beginning of the year, and at $54.92 per share, it is trading 60.6% below its 52-week high of $139.51 from December 2024. Investors who bought $1,000 worth of The Trade Desk’s shares 5 years ago would now be looking at an investment worth $1,179.
Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
