Shares of Trade Desk Inc (NASDAQ:TTD) tumbled 38% on Friday morning after the digital advertising technology company posted better-than-expected second-quarter revenue but issued cautious guidance and faced renewed scrutiny over intensifying competition, particularly from Amazon.
The company reported second-quarter revenue of $694 million, beating analysts’ expectations of $684 million and marking a 19% year-over-year increase. Adjusted earnings per share came in at $0.41, just below the $0.42 consensus, though still up 5% from the year-ago period.
Adjusted EBITDA rose 12% to $271 million, with a margin of 39%, down 200 basis points year-over-year. Net income for the quarter was $90 million, up 6%, while customer retention remained above 95% for the eleventh consecutive year.
CEO Jeff Green said the company continues to outperform the broader digital ad market. “Q2 was a strong quarter,” Green told investors. “Kokai and OpenPath are unlocking major innovation across the open internet. We're delivering exceptional value and empowering the world’s largest brands.”
However, investor reaction was sharply negative, with the stock falling to around $54.44 in early trading. Analysts cited rising competitive pressures, especially from Amazon’s demand-side platform (DSP), and a more subdued outlook for the third quarter.
The Trade Desk forecast at least $717 million in revenue for the third quarter, slightly below Wall Street’s estimate of $718 million, and guided to adjusted EBITDA of approximately $277 million.
Wedbush downgraded the stock to “Neutral” from “Outperform” and cut its price target to $68. The firm noted that while second-quarter performance was solid, Amazon’s recent integrations with Disney and Roku are reshaping the competitive landscape. These partnerships give advertisers direct access to premium connected TV (CTV) inventory and raise questions about The Trade Desk’s long-term value proposition.
“Several marketers are migrating larger budgets from TTD to Amazon’s DSP,” Wedbush analysts wrote, adding that increased investment across The Trade Desk’s platform this year is expected to reduce adjusted EBITDA margin by around 175 basis points in 2025.
Bank of America also downgraded the stock, moving it to “Underperform” from “Buy” and cutting its price objective to $55. “The company’s Q3 outlook implies a deceleration in underlying growth and makes it harder to dismiss recent concerns,” the firm wrote in a note.
While analysts still view The Trade Desk as a long-term beneficiary of the shift from linear TV to connected TV and broader adoption of programmatic advertising, sentiment has turned more cautious amid macro uncertainty, regulatory risk, and intensifying platform competition.
The stock is now trading at approximately 22 times Bank of America’s revised 2026 adjusted EBITDA estimate, a valuation the bank says is difficult to justify given expectations for slower revenue growth.