Shares of The Trade Desk (NASDAQ:TTD) charged sharply higher on Monday, surging as much as 16.6%. As of 11:38 a.m. ET, the stock was still up 15.2%.
Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
The catalyst that sent the digital advertising stock higher was anticipation regarding the company’s upcoming financial report and the return of one of its founders.
Image source: Getty Images.
In a Pickle
The Trade Desk announced last week that former chief technology officer (CTO) and co-founder Dave Pickles was returning after stepping down in 2023. Pickles will establish and lead the company’s newly formed CTO council to “help shape the next generation of The Trade Desk platform.” Pickles will focus “on aligning technology strategy, architectural direction, operational excellence, and key engineering investments–including agentic capabilities and advanced AI-powered advertising workflows.”
Pickles is returning at a critical time for The Trade Desk. The company has floundered over the past year as slowing growth and increasing competition have weighed on its results. In the second quarter, The Trade Desk delivered revenue that grew just 3% year over year to $715 million, while its adjusted earnings per share (EPS) of $0.34 slumped 17%.
Perhaps even more concerning was the company’s outlook, which called for revenue to decline 12% year over year to $650 million, while adjusted EBITDA of $160 million is expected to plunge 50%.
The return of Pickles has given investors hope that The Trade Desk can return to its former glory, but they may be getting ahead of themselves.
That said, the stock is trading for just 18 times earnings, near an all-time low set just last month. Given the pessimism built into the stock price, it wouldn’t take much to send The Trade Desk higher — as evidenced by its movement today.
We’ll know more soon, as The Trade Desk is scheduled to report its Q3 results after the market close today.
Missed AI’s “Act 1”? Act 2 Could Be 14x Bigger
Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005.
But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout, a massive technology build-out that Google’s CEO says could be more profound than fire or electricity.
While everyone watches the chip designers, one “backbone” company provides the critical technology that Nvidia and AMD literally cannot function without. We’ve detailed this under-the-radar player in our new AI Playbook.
Danny Vena, CPA has positions in The Trade Desk. The Motley Fool has positions in and recommends The Trade Desk. The Motley Fool has a disclosure policy.
Why The Trade Desk Stock Skyrocketed Today was originally published by The Motley Fool
