TTD vs. GOOGL: Which Ad Tech Stock Is the Better Pick for Now?

Core Insights - The Trade Desk, Inc (TTD) and Alphabet Inc (GOOGL) are key players in the programmatic advertising ecosystem, with TTD focusing on data-driven ads through its demand-side platform and GOOGL dominating the digital ad space via its extensive ecosystem including Google Search and YouTube [1][2] Group 1: The Trade Desk (TTD) - TTD is positioned well for long-term growth, driven by trends in connected TV (CTV), retail media, and its AI-powered platform Kokai [3][4] - CTV is the fastest-growing segment in digital advertising, with TTD expecting it to become the default buying model due to its advantages over traditional models [4] - In Q3, video advertising, including CTV, accounted for over 50% of TTD's total business, with audio also emerging as a growth driver [5] - Kokai, used by 85% of TTD's clients, has shown significant performance improvements, delivering 26% better cost per acquisition and 94% better click-through rates compared to its previous platform [6] - TTD's OpenPath and OpenAds initiatives enhance transparency and efficiency by connecting advertisers directly to publishers [7] - Despite being a leading independent DSP, TTD faces increasing competition from major players like Meta, Apple, Google, and Amazon [8] - TTD is focusing on geographic expansion, but this comes with complexities and risks, including regulatory challenges and macroeconomic volatility [9] Group 2: Alphabet Inc (GOOGL) - GOOGL reported Q3 2025 ad revenues of $74.18 billion, a 12.6% year-over-year increase, with Search and YouTube being the primary revenue sources [11][12] - AI is significantly enhancing GOOGL's advertising capabilities, with Search revenues up 14.5% year-over-year, driven by AI tools [13] - The launch of AI Max has led to rapid adoption among advertisers, resulting in higher conversion values and expanded reach [14] - YouTube ads generated $10.3 billion in revenue, a 15% increase year-over-year, supported by AI features that enhance content creation [15] - GOOGL's cloud segment also shows strong momentum, with a backlog of $155 billion, up 82% year-over-year [17] - The company generated $48.41 billion in cash from operations in Q3 2025, with cash equivalents and marketable securities totaling $98.5 billion [18] Group 3: Stock Performance and Valuation - Over the past month, TTD's stock has decreased by 23.3%, while GOOGL's stock has increased by 11.1% [19] - Both TTD and GOOGL are considered overvalued, with TTD trading at a forward P/E ratio of 19.55X and GOOGL at 26.14X [22][23] - Analysts have made slight revisions to TTD's earnings estimates, while GOOGL has seen a 5% upward revision [24][27] - In terms of Zacks Rank, GOOGL is rated as a better investment option compared to TTD [28]