Trade Desk's stock has never been this cheap, and its brutal selloff might finally be over

By Emily Bary

An analyst is ending his bearish call on the ad-tech stock, which was the biggest S&P 500 loser of 2025

Trade Desk plays into advertising technology for connected televisions.

Trade Desk's stock was the worst performer in the S&P 500 last year, but the pain may be over, according to an analyst.

That doesn't mean investors should jump back in, but analyst Michael Nathanson said that Trade Desk's stock (TTD) now adequately reflects the risks and challenges facing the advertising-technology company. He just upgraded the stock to neutral from sell.

Trading at about 34 times estimated forward earnings, Trade Desk's stock has never been cheaper, according to the MoffettNathanson analyst. That's coming off a 67.7% slide last year - the steepest in the S&P 500 SPX, according to Dow Jones Market Data - though technically the company didn't join the index until July. After falling 1% on Monday, the stock has dropped 2.8% to start 2026.

Read: Reasons to be optimistic about the S&P 500's worst-performing stocks

Investors have worried about a variety of factors affecting Trade Desk, including stiff competition from Amazon.com (AMZN), a growth slowdown in connected-television advertising and questions about the future of the open web, which is online information that's easily accessible without requiring access to one company's ecosystem. Furthermore, Trade Desk's stock started last year with a "sky-high valuation" that "left little margin for error," Nathanson noted. That valuation eroded once the competitive pressures deepened.

"To be clear, The Trade Desk continues to innovate aggressively" and still looks like the industry leader both in terms of its technology and its capabilities around demand-side platforms, which let marketers broadly buy ad space in an automated way. "However, it now faces a formidable competitor in Amazon, which is competing on both price and access to unparalleled first-party commerce data," Nathanson said in his latest report.

His upgrade reflects both that "the structural risks outlined above remain present, and in some cases intensifying" but also that they're already baked into the current price, "limiting further downside."

Nathanson flagged that earnings expectations have come down for Trade Desk as the reverse was true for the market more generally. But the company could still grow earnings at a 21%-plus annual clip over the next two years, which is better than the 14% forecast for the broader market, he said. Trade Desk is cheaper on the basis of its price-to-earning-to-growth ratio (1.28) than the broader market (1.41).

See also: Microsoft's business is on fire. So how can its stock break from its curse?

Of the 41 analysts tracked by FactSet who cover Trade Desk's stock, 25 have buy-equivalent ratings, 11 have neutral ratings and five have sell-equivalent ratings.

-Emily Bary

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