TLDR
- TTD stock fell 5% after Q4 2025 results, despite beating earnings expectations, due to weak Q1 2026 guidance of $678M (just 10% growth)
- Wedbush downgraded TTD to “underperform” Friday, maintaining a $23 price target — implying 22.8% downside
- The downgrade came after an 18% single-day rally driven by reports of a rumored OpenAI partnership
- Wedbush warns the OpenAI deal hype is overblown and that OpenAI will likely build its own ad platform over time
- TTD’s 2025 revenue grew 18% to $2.9B — down from 26% growth in 2024 — as Amazon’s ad business ate into its market
The Trade Desk’s rough stretch got a little rougher on Friday. The stock — which had already lost 66% of its value over the past year — surged 18% on Thursday after The Information reported a rumored partnership with OpenAI. Then Wedbush stepped in.
The research firm downgraded TTD from “neutral” to “underperform,” keeping its price target at $23. With the stock currently trading around $29.80, that implies roughly 22.8% downside from current levels.
Wedbush acknowledged the OpenAI deal is a “vital long-term strategic move” for TTD, particularly as a defence against AI search cannibalization. But it argued the market’s reaction got well ahead of reality.
The firm warned that as OpenAI scales, it will likely build its own in-house demand-side platform (DSP) to capture ad revenue currently going to third parties like TTD. It also noted that as OpenAI opens its inventory to more DSP partners, TTD’s win rates will face “natural compression.”
“We do not expect TTD’s revenue to grow in lockstep with the growth of OpenAI’s product,” Wedbush said.
A Business Already Under Pressure
Before Thursday’s OpenAI-fueled bounce, TTD had been grinding lower for months. The company’s Q4 2025 results, released February 25, beat expectations — but the guidance was the problem.
TTD’s 2025 revenue grew 18% to $2.9 billion, a step down from 26% growth in 2024. Earnings per share came in at $1.77, up just 6.6% year over year.
The company guided for Q1 2026 revenue of $678 million, representing only 10% growth. That number disappointed investors and triggered the initial 5% post-earnings drop.
Amazon has been a key pressure point. Its advertising revenue hit $21.3 billion in Q4 2025, up 23% — outpacing TTD’s 14% quarterly revenue growth. TTD’s management has pointed to a surplus of ad supply in the market last year as a factor that weighed on margins.
TTD’s Case for the Defense
TTD isn’t going down without a fight. On its earnings call, management cited a case study where a major appliance brand compared its platform directly against Amazon’s DSP.
The results: TTD reached 70% more unique households, at 30% lower total cost, with campaign performance six times better than Amazon’s platform.
The argument is that TTD’s neutrality — it doesn’t own ad inventory the way Amazon does — gives advertisers a wider reach across the open internet.
The programmatic advertising market was valued at $833 billion in 2024 and is projected to reach $4.4 trillion by 2032, growing at roughly 23% annually.
The stock currently trades at about 4x sales, a discount to the U.S. tech sector average of 8.3x. The 12-month median analyst price target sits at $32, suggesting 34% upside from current levels — though Wedbush’s $23 target sits well below that consensus.
TTD stock was down more than 2% in premarket trading Friday following the Wedbush downgrade.
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