The Trade Desk Stock Soars on Inclusion in S&P 500. History Says This Will Happen Next.

Group 1: Company Overview - The Trade Desk is a recognized leader in ad tech software and the largest independent demand-side platform (DSP) in the industry [7][8] - The company's software utilizes artificial intelligence (AI) to assist agencies and brands in planning, measuring, and optimizing campaigns across digital channels [8] - The Trade Desk is the dominant DSP in connected TV advertising, sourcing inventory from major platforms like Walt Disney, Netflix, and Roku [8] Group 2: Competitive Advantage - The independence of The Trade Desk means it does not own media content or ad inventory, eliminating conflicts of interest that competitors like Alphabet and Meta Platforms face [9] - The company's competitive moat is attributed to its industry-leading technology stack, trusted brand, and transparent reporting on ROI for ad spending [10] - Analysts from Frost & Sullivan have ranked The Trade Desk as the leading DSP based on growth and innovation, highlighting its sophisticated AI tools for optimizing ad campaign performance [10] Group 3: Financial Performance and Projections - Wall Street estimates that The Trade Desk's adjusted earnings will grow at 12% annually through 2026, although this valuation may appear expensive at 47 times adjusted earnings [11] - The ad tech spending is projected to grow at 14% annually through 2030, and The Trade Desk has consistently gained market share, suggesting potential for faster earnings growth [11] - Historically, The Trade Desk has outperformed consensus earnings estimates by an average of 12% over the last six quarters, indicating that current valuations may be more reasonable in hindsight [12] Group 4: Market Impact of S&P 500 Inclusion - The Trade Desk's stock has advanced over 7% due to its upcoming inclusion in the S&P 500, effective July 18, replacing Ansys [1] - Historically, stocks added to the S&P 500 have returned an average of 13.6% in the 12 months following their inclusion, suggesting a potential 14% increase for The Trade Desk [4] - The inclusion in the S&P 500 elevates a company's profile and is increasingly important as passive investment funds grow, although the benefits may be short-lived [6]