Why The Trade Desk Stock Plunged 67% in 1 Year

By Lawrence Nga – Mar 7, 2026 at 5:15PM ESTKey PointsThe Trade Desk continued growing in 2025, but the end of its long revenue-beat streak shifted investor psychology.Competition now defines the risk profile.When a stock trades at elevated multiples, even modest execution hiccups or supply uncertainties can lead to sharp declines.The Trade Desk (TTD 1.75%) did not see its business collapse in 2025. Revenue still grew in the high teens. Customer retention remained above 95%. And the company continued investing heavily in artificial intelligence (AI) and connected TV. Yet the stock price plunged 67.7% in 2025. The decline reflected a reset in expectations rather than a complete breakdown in fundamentals. Several forces converged at once, and investors adjusted quickly to the new reality. Image source: Getty Images. The end of the "flawless execution" narrative Over the years, The Trade Desk has built one of the most consistent track records in digital advertising. The company beat expectations for over 30 consecutive quarters. That reliability fueled investors' expectations that the future would likely remain the same. So, when the streak ended in late 2024, investor psychology shifted. Even though growth remained solid in 2025, the perception of near-perfect execution disappeared. So investors recalibrated. Historically a high-multiple stock, The Trade Desk's valuation subsequently compressed to reflect the new environment's weaker predictability. As of this writing, the stock still trades at a price-to-earnings (P/E) ratio of 30 times even after the massive share-price drawdown. To be fair, the business did not deteriorate that dramatically, at least not yet. The narrative did. Add that to the nose-bleed valuation, and it's not surprising the stock price reverted massively lower. ExpandNASDAQ: TTDThe Trade DeskToday's Change(-1.75%) $-0.52Current Price$29.27Key Data PointsMarket Cap$14BDay's Range$28.04 - $29.4752wk Range$21.08 - $91.45Volume1.4MAvg Vol17MGross Margin78.63% Competition intensified for The Trade Desk At the same time, competitive pressure increased. Amazon expanded aggressively in advertising. Its demand-side platform gained momentum, and its partnerships with the likes of Netflix strengthened its connected TV position. Amazon combines retail data, inventory, and measurement into a single ecosystem, appealing to performance-focused advertisers. Alphabet's Google and Meta Platforms also embedded AI more deeply into their advertising stacks. Both companies control massive first-party data ecosystems and have improved optimization tools throughout 2025. Unsurprisingly, investors began questioning whether The Trade Desk could maintain clear differentiation in a market increasingly dominated by vertically integrated platforms. Don't get me wrong. The company still operates in a large and growing industry. But the competitive landscape now looks tougher than it did a few years ago. Connected TV supply concerns Connected TV remains central to The Trade Desk's growth thesis. However, tighter relationships between major streaming platforms and large ecosystems like Amazon raised concerns about supply concentration. Particularly, The Trade Desk does not own inventory. It depends on partnerships. If premium, authenticated supply consolidates within a few ecosystems, future growth assumptions face greater uncertainty. While I think it may be too bearish to assume that The Trade Desk is out of the CTV race, just the perception of that risk has weighed on the stock. What does it mean for investors? Let's be fair.

The Trade Desk remains profitable and innovative. But in 2025, investors stopped treating it as untouchable. The plunge reflected shifting expectations, rising competition, supply concerns, and valuation pressure. Now the company must restore confidence through consistent execution in 2026. All eyes are on the performance in the next few quarters.Read NextMar 7, 2026 •By Adam LevyThe Trade Desk vs. AppLovin: Which AI-Powered Adtech Stock Is the Better Buy?Mar 6, 2026 •By Keithen DruryPrediction: The Trade Desk Will Be One of the Best-Performing Stocks of 2026Mar 6, 2026 •By Harsh ChauhanThe Trade Desk Stock Dropped 5% on a Guidance Miss: 2 Reasons It's a Buying OpportunityMar 5, 2026 •By Daniel SparksJeff Green Loads Up on The Trade Desk's Beaten-Down Stock.

Should You Buy, Too?Mar 5, 2026 •By Josh Kohn-LindquistStock Market Today, March 5: The Trade Desk Soars on Reports of OpenAI Ad Sales Talks and Insider BuyingMar 5, 2026 •By Jeremy BowmanThe Trade Desk Just Jumped 18%. Is It a Buy?About the AuthorLawrence Nga is a contributing Motley Fool stock market analyst covering technology, consumer goods, e-commerce, AI, fintech, and China stocks. Before joining The Motley Fool, Lawrence wrote for Motley Fool Singapore and held roles as a lecturer at Kaplan Financial China and Liverpool College of Management Science, a performance analyst at AB Sugar, a financial analyst at BSO China Limited, and manager of supply chain finance at British Sugar. He earned a Bachelor of Science in Applied Accounting from Oxford Brookes University and holds credentials from both the Association of Chartered Certified Accountants (ACCA) and the Chartered Institute of Management Accountants (CIMA).TMFLawrencengaStocks MentionedThe Trade DeskNASDAQ: TTD$29.27(-1.75%)-$0.52*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.