The Trade Desk(US:TTD) The Motley Fool·2025-12-13 03:00Core Viewpoint - The Trade Desk is a high-quality company in ad tech, but its investment potential is debated as competitive pressures increase going into 2026 [1] Reasons to Buy - The business remains fundamentally strong with revenue growth in the high teens and customer retention exceeding 95% in 2025, indicating continued advertiser reliance on the platform [3][4] - The growth of connected TV (CTV) and retail media provides long-term tailwinds as advertisers shift budgets to data-driven channels, positioning The Trade Desk to benefit from this structural market growth [4] - The AI-powered platform Kokai is gaining traction, leading to lower acquisition costs and improved engagement, which could provide a competitive advantage if it continues to deliver ROI [5][6] Reasons to Stay Cautious - Competition has intensified with Amazon's advertising business gaining traction, particularly through its partnership with Netflix, which poses risks to The Trade Desk's premium supply access [10][11] - The company's history of flawless execution has been disrupted, with a streak of beating revenue expectations ending in late 2024, leading to increased volatility and investor skepticism [12][13] - The stock carries a premium valuation with a P/E ratio of 46, requiring strong growth and stable margins to justify the price, which is uncertain given the current competitive landscape [16][18]