TTD vs. PUBM: Which Ad-Tech Stock Is the Smarter Pick Now?

Industry Overview - The global digital advertising market is projected to grow at a CAGR of 9.4% from 2026 to 2035, indicating its attractiveness as a long-term growth market in the technology sector [1]. Company Profiles The Trade Desk (TTD) - TTD operates a leading demand-side platform (DSP) focused on data-driven advertising, facing significant competition from major players like Meta, Apple, Google, and Amazon [2][5]. - TTD's total operating costs surged 17% year over year to $457 million, driven by investments in enhancing platform capabilities [6]. - The company expects revenues of at least $840 million for Q4 2025, with a projected year-over-year revenue growth rate of 18.5% [9]. - TTD's AI-powered Kokai platform is used by 85% of its clients, strengthening its competitive position [8][11]. PubMatic (PUBM) - PUBM is a sell-side platform that helps publishers monetize their inventory, with a focus on connected TV (CTV) and retail media growth [2][10]. - PUBM reported over 50% year-over-year growth in CTV revenues in Q3, capitalizing on the shift of approximately $155 billion in linear television ad spend to digital formats [12]. - The company anticipates fourth-quarter revenues between $73 million and $77 million, with adjusted EBITDA projected between $19 million and $21 million [16]. - PUBM's revenues from emerging revenue streams grew over 80% year over year, contributing 10% of total revenues in Q3 [14]. Competitive Landscape - Both TTD and PUBM are experiencing growth in CTV and retail media but face rising competition and macroeconomic risks [11]. - TTD's focus on geographic expansion and AI integration presents both opportunities and challenges, particularly with regulatory changes [7][8]. - PUBM's reliance on major DSP clients poses risks, as evidenced by a recent revision in bidding approach affecting its top line [17]. Share Performance & Valuation - Over the past month, TTD and PUBM's shares have declined by 25.8% and 14.7%, respectively [20]. - TTD's shares are trading at a forward price/sales ratio of 3.55X, while PUBM's is at 1.09X, indicating a higher valuation for TTD [21]. Analyst Estimates - Analysts have kept estimates unchanged for both TTD and PUBM for the current fiscal year, indicating stability in expectations [22][24]. - TTD currently holds a Zacks Rank of 4 (Sell), while PUBM has a Zacks Rank of 3 (Hold), suggesting PUBM may be a better pick at the moment [25].