Core Insights - Columbia Threadneedle Investments reported strong market performance in Q3 2025, with a composite return of 12.06%, slightly below the S&P Global 1200 Information Technology Index's return of 12.82% [1] - The fund's positive stock selection contributed to its relative performance during the quarter [1] Company Analysis: The Trade Desk, Inc. (NASDAQ:TTD) - The Trade Desk, Inc. experienced a one-month return of -5.38% and a significant 57.49% decline in share value over the past 52 weeks, closing at $50.28 with a market capitalization of $24.584 billion on October 31, 2025 [2] - Challenges faced by The Trade Desk included cautious guidance, tariff impacts on large-brand spending, rising competition from Amazon, and the departure of the CFO [3] - The company's Kokai AI platform now powers 75% of client spending, with connected TV being the fastest-growing channel, accounting for nearly half of total spending [3] Hedge Fund Interest - The Trade Desk, Inc. was held by 60 hedge fund portfolios at the end of Q2 2025, a slight decrease from 61 in the previous quarter [4] - While The Trade Desk is recognized for its potential, certain AI stocks are viewed as having greater upside potential and lower downside risk [4]

Core Insights - The Trade Desk (TTD) stock has declined 54.5% year to date, significantly underperforming the Zacks Internet Services industry's growth of 30.4% and the S&P 500's gain of 15% [1][8] - The stock is trading at a significant discount to its 52-week high of $141.53, closing at $53.49, which is closer to its 52-week low of $42.96 [4] - The decline is attributed to a cautious ad spending environment and macroeconomic uncertainties affecting advertising budgets [5][8] Price Performance - TTD's stock performance has lagged behind peers such as Amazon (AMZN), Magnite (MGNI), and PubMatic (PUBM), with AMZN and MGNI gaining 1.1% and 20% respectively, while PUBM is down 43.7% [1] - The stock's current valuation is considered stretched, with a forward 12-month price/sales ratio of 8.04X compared to the industry's 6.46X [12] Competitive Landscape - The competitive environment is intensifying, with major players like Google and Amazon dominating the space, leveraging their control over inventory and first-party user data [6] - Smaller competitors like Magnite and PubMatic are also expanding their presence in Connected TV (CTV) and retail media, increasing competition for ad dollars [6] Growth Drivers - Despite challenges, TTD has several growth drivers, including CTV, retail media, international expansion, and its Kokai AI platform [13][21] - CTV is highlighted as a fast-growing segment, with programmatic CTV delivering high returns on ad spend, supported by partnerships with major companies like Disney and Netflix [14][17] - The Kokai platform is gaining traction, with over 70% of clients using it, expected to enhance campaign precision and efficiency [18] Financial Outlook - For the third quarter of 2025, TTD anticipates revenues of at least $717 million, indicating a 14% year-over-year growth [20] - Total operating costs surged 17.8% year over year to $577.3 million, raising concerns about profitability if revenue growth does not keep pace [9] Strategic Initiatives - TTD is focusing on securing long-term partnerships with major advertisers and agencies, with nearly 100 joint business plans in the pipeline [15] - The company is also innovating with its UID2 initiative, an open-source alternative to third-party cookies, and the Audience Unlimited feature to enhance data accessibility for advertisers [19]

Core Insights - The Trade Desk experienced a significant decline in stock price due to decelerating growth and increased competition in the adtech sector [1][5] - The company's second-quarter revenue rose 19% to $694 million, surpassing consensus estimates, but growth is slowing [3][4] - Analysts have downgraded the stock, citing concerns over competitive pressures from major players like Netflix, Amazon, Meta, and Alphabet [5] Financial Performance - Revenue for the second quarter was $694 million, exceeding the consensus estimate of $686 million [3] - Adjusted EBITDA increased by 12% to $271 million, while adjusted earnings per share rose from $0.39 to $0.41, matching estimates [4] - The company forecasts third-quarter revenue of at least $717 million and EBITDA of about $277 million, indicating a sequential decline in margins [6] Market Reaction - Following the earnings report, The Trade Desk's stock fell by 38.1%, with several analysts downgrading their ratings [1][5] - Bank of America notably double-downgraded the stock to underperform, highlighting justified concerns about competitive pressures [5] - The current price-to-earnings ratio stands at 31 based on adjusted earnings, reflecting a fair valuation given the uncertainty in growth prospects [7]

Core Viewpoint - The Nasdaq-100 index has rebounded significantly after a bear market earlier this year, now sitting less than 5% below its February peak, despite ongoing economic uncertainties and weakened consumer sentiment. There are promising investment opportunities within the index, particularly in two stocks: The Trade Desk and Advanced Micro Devices. Group 1: The Trade Desk - The Trade Desk's share prices fell earlier this year due to missing fourth-quarter guidance, attributed to internal errors rather than market competition [3] - In its first-quarter earnings report, The Trade Desk exceeded expectations with a 25% year-over-year revenue increase to $616 million, surpassing estimates of $575.3 million [3] - The company is a leading independent demand-side platform in ad tech, with significant investments in AI; two-thirds of its customers are now using its Kokai AI platform, which can analyze approximately 17 million ad opportunities per second [4] - The Trade Desk is positioned to benefit from potential regulatory setbacks for Google, which has been declared an illegal monopoly in U.S. District Court, potentially leading to fines or divestitures [5] - The stock is currently down 46% from its recent peak, indicating substantial recovery potential [6] Group 2: Advanced Micro Devices - Advanced Micro Devices (AMD) has also seen a significant decline from its peak, following a period of high expectations during the early AI boom [7] - The company reported a 36% year-over-year revenue increase in the first quarter, reaching $7.44 billion, with data center revenue surging 57% to $3.7 billion, driven by demand for EPYC CPU and Instinct GPU chips [8] - AMD has entered a $10 billion collaboration with Humain, a Saudi AI company, and has made strategic acquisitions to enhance its competitive position in the data center market [9] - The company announced a $6 billion share repurchase authorization, indicating readiness to capitalize on stock price discounts [10] - AMD's forward P/E ratio is now under 30 based on adjusted earnings, presenting a favorable valuation for a company poised to benefit from the AI boom [10]

Group 1: Technology Sector Overview - The technology sector has historically produced rewarding growth stocks, with artificial intelligence (AI) expected to create further wealth-building opportunities for investors [1] Group 2: Nvidia - Nvidia's powerful graphics processing units (GPUs) are in high demand, with Wall Street's average price target 47% above its current share price of $111 [3] - Nvidia's revenue more than doubled to $130 billion last year, with 88% of sales coming from data centers; analysts expect revenue to exceed $200 billion this year due to demand for new data center chips [4] - The Blackwell computing system, designed for advanced AI workloads, is anticipated to drive significant growth, with billions in sales reported in its first quarter [5] - Despite some analysts expressing caution due to the cyclical nature of the chip industry and economic uncertainties, major customers like Microsoft and Google plan to continue heavy investments in data center infrastructure [7][9] Group 3: The Trade Desk - The Trade Desk, a leading digital ad-buying platform, has delivered a nearly 1,700% return since 2016, with an average price target 64% above its current share price of $53 [10] - The company reported a 26% year-over-year revenue increase, driven by a fee-based model that enhances profitability and cash flow [11] - Although the company experienced a revenue miss, it has a significant addressable market estimated at $1 trillion, with only $12 billion in ad spending on its platform last quarter [12] - The Trade Desk is investing in AI to improve its services, with expectations that all customers will use its Kokai AI platform by the end of 2025 [12] - Current estimates suggest revenue growth of 17% for 2025, with improving margins indicating potential for robust earnings growth [13] - The stock is currently priced at a fair 30 times this year's earnings projection, presenting a potential buying opportunity for long-term investors [14]

Core Viewpoint - Market volatility presents an opportunity for long-term investors to acquire undervalued growth stocks, particularly in the context of companies like Meta Platforms and The Trade Desk Group 1: Meta Platforms - Meta Platforms is experiencing strong growth driven by investments in artificial intelligence (AI), trading at a reasonable 24 times earnings [2][4] - The company has over 700 million monthly active users engaging with its Meta AI assistant, with expectations to reach 1 billion by 2025 [3] - In the previous year, Meta earned $62 billion in net income on $164 billion in revenue, reflecting a 22% growth in the top line [4] - Analysts project a 16% annualized earnings growth for Meta in the coming years, suggesting potential returns for current investors [5] Group 2: The Trade Desk - The Trade Desk is a leading digital ad-buying platform benefiting from a growing digital advertising market valued at $800 billion [6] - Despite a recent revenue miss, the company's competitive position remains strong, presenting a buying opportunity for investors [6] - The Trade Desk's revenue grew 26% to $2.4 billion in 2024, with a profit margin of 16% [8] - The connected TV ad market, projected to reach $46 billion by 2026, represents a significant growth opportunity for The Trade Desk [8] - Analysts expect revenue growth of 18% this year, with the current share price around $50 seen as a bargain [9]