Trade Desk plunged Friday after the digital advertising firm reported second quarter earnings that matched estimates while revenue topped Wall Street targets by about 1%. September guidance met expectations amid rising competition with Amazon.com.
The company reported June quarter earnings after the market close on Thursday. On the stock market today, Trade Desk stock tumbled 38.6% to close at 54.23.
Rising Amazon Competition
In Q2, Trade Desk earnings rose 5% to 41 cents a share from a year earlier, the company said. Revenue climbed 19% to $694 million.
Trade Desk stock analysts expected earnings of 41 cents a share on sales of $685 million, according to FactSet.
"The Amazon shadow over this stock is now front and center and harder to deny," said Michael Nathanson, analyst at MoffettNathanson in a report. "Amazon needed more time to scale their demand side platform. Yet with their new deal with Roku coming on later this year, the debut of new NBA programming on Amazon Prime Video, the fallout from Omnicom's merger with IPG to create a much more lethal buying footprint with a likely heavier emphasis on Amazon's DSP, it seems inevitable that Amazon's momentum will become more apparent even to TTD's diehard bulls."
Amazon's demand side platform lets advertisers buy display, video, and audio ads both on Amazon-owned properties and across the internet.
Oppenheimer analyst Jason Helfstein maintained an out-perform rating on Trade Desk stock. Various issues impacted Q2 results, he said in a report.
BofA Downgrades Trade Desk Stock
"Management blames tariff uncertainty, slower pace of next-gen adtech adoption by some large advertisers, and lack of excess ad budget on macro uncertainty," Helfstein said. "The Amazon DSP bear thesis will remain an overhang, despite mostly self-inflicted issues from persistent senior management turnover."
At BMO Capital Markets, analyst Brian Pitz said management downplayed Amazon's impact on the Q2 earnings call with Wall Street analysts.
"TTD pushed back on bears believing Amazon is increasingly gaining open internet share, suggesting (Amazon's) owned inventory makes it impossible to objectively participate at scale," Pitz said in a report. "(Trade Desk) CEO Jeff Green sees Amazon as a potential partner, suggesting Amazon may ultimately look to open up Prime Video demand externally to partners like TTD over time."
Bank of America analyst Jessica Reif Ehrlich downgraded Trade Desk stock to under-perform from buy.
"When Trade Desk reported Q4 2024 results, it raised concerns about competitive pressures, execution and whether it could sustain 20%-plus long-term growth to support its premium valuation," she said in a report. "Bulls argued the miss stemmed from execution missteps and that a reset bar would restore TTD's beat and raise cadence. However, the company's Q3 outlook, which implies a deceleration in underlying growth, makes it harder to dismiss these concerns as a one-off event, especially against the backdrop of robust advertising growth being reported by many of the largest walled gardens."
Guidance Underwhelms Investors
The Ventura, Calif.-based company said Q2 earnings before interest, taxes, depreciation and amortization (EBITDA) rose 39% to $271 million. Analysts estimated EBITDA of $261 million.
For the September quarter, Trade Desk said it expects revenue of $717 million, roughly in-line with estimates of $716 million. It predicted EBITDA of $277 million, also in-line with estimates.
"The Trade Desk reported a solid quarter for revenue, but the beat was likely below investor expectations," said RBC Capital analyst Matthew Swanson in a report. "Q3 guidance was more or less in line with consensus estimates for both adjusted EBITDA and revenue."
In addition, Trade Desk named a new chief financial officer, Alex Kayyal. He has been on Trade Desk's board and was most recently a partner at Lightspeed Venture Partners.
Heading into the Trade Desk earnings report, TTD stock had retreated 25% in 2025. Shares plunged in February on weak guidance amid a company sales reorganization.
Trade Desk Stock Technical Ratings
The company's automated platform enables brands and ad agencies to buy online and mobile ads in real time, rather than in advance manually. In addition, Trade Desk helps clients leverage online data to improve their targeted advertising.
Further, internet TV (also called connected TV) has been a growth driver for Trade Desk stock as more video streaming services become advertising supported.
Trade Desk stock holds a Composite Rating of 83 out of a best-possible 99, according to IBD Stock Checkup.
Meanwhile, Trade Desk stock holds an Accumulation/Distribution Rating of B. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. (A+ signifies heavy institutional buying; E means heavy selling. Think of a C grade as neutral.)
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
