Can Trade Desk's CTV Momentum Hold Off Rising Competition?

Core Insights - The Trade Desk's Connected TV (CTV) business is its largest and fastest-growing channel, accounting for approximately half of its revenues in Q3 [1] - The Trade Desk positions itself as a buyer's platform for the open internet, contrasting with walled-garden platforms like Meta and Google [1] - The transition towards biddable CTV is gaining momentum, with expectations that it will become the default buying model in the future [2] Company Strategy - The Trade Desk's strategy focuses on the open internet, where price discovery and competition thrive, despite advertisers allocating less budget to this area compared to consumer online time [1] - Technology investments, particularly in the AI-powered DSP experience Kokai, are central to its growth strategy, with 85% of clients using Kokai as their default experience [3] - Supply-side initiatives like OpenPath and OpenAds enhance the ecosystem by connecting advertisers directly to publishers, improving transparency and efficiency [4] Competitive Landscape - Amazon's expanding DSP business poses significant competition to The Trade Desk, alongside independent ad-tech companies like Magnite and PubMatic [5] - PubMatic's CTV revenues increased nearly 50% year over year in Q3 2025, driven by higher premium supply and the growth of small and mid-market advertisers [6] - Magnite's CTV business is also thriving, with live sports and partnerships with major publishers contributing to its growth [9][10] Financial Performance - The Trade Desk's shares have gained 1% in the past month, outperforming the Internet – Services industry's rise of 0.8% [11] - The forward price/earnings ratio for The Trade Desk is 18.88X, lower than the industry average of 28.67X [12] - The Zacks Consensus Estimate for The Trade Desk's earnings for 2025 has been revised upwards over the past 60 days [13]