The Worst-Performing S&P 500 Stock in 2025 Is Down 70%. Should You Buy the Dip?

Core Viewpoint - Trade Desk (TTD) is projected to be the worst-performing stock in the S&P 500 Index for the year, with challenges expected to persist into 2026 due to rising costs and threats from artificial intelligence [1][3]. Financial Performance - TTD shares have declined nearly 70% since the beginning of 2025, indicating significant underperformance [2]. - The Jefferies analyst has maintained a "Hold" rating on TTD but has reduced the price target to $40, suggesting less than 10% upside potential from current levels [4]. Cost and Investment Challenges - The company is expected to face increased costs as it needs to invest heavily in infrastructure and engineering to stay competitive in the AI landscape [3]. - There is a risk of profit margin contraction as sales growth is unlikely to keep pace with these rising costs, complicating recovery prospects for TTD stock in 2026 [3]. AI Impact - Artificial intelligence poses a long-term threat to TTD, as it may enable brands to purchase ads directly from platforms like Disney, Netflix, or Google, bypassing Trade Desk's services [5]. - Concerns about TTD potentially becoming obsolete in the next five years due to AI advancements suggest that investors should be cautious about paying a premium for its stock at this time [6]. Market Sentiment - Despite the negative outlook from Jefferies, other Wall Street analysts have a more optimistic view, with a consensus rating of "Moderate Buy" and a mean target price of about $62, indicating potential upside of over 65% [8].