The Trade Desk stock price crashed by 68% in 2025, making it the worst performer in the S&P 500 Index. Its crash led to a sharp decline in its market cap, which moved from $70 billion in January to $19 billion today. So, why did this advertising giant crash?
Why The Trade Desk stock crashed
The Trade Desk is a to company in the advertising industry, where it provides a programmatic media-buying platform, enabling advertisers, agencies, and brands to purchase and manage ad campaigns. These entities can use its platform to buy ads across media entities like streaming TV, online video, and radio.
The Trade Desk’s business has been doing well, helped by the rising demand for its solutions. Data shows that its annual revenue jumped to over $2.4 billion in 2024 from $1.945 billion a year earlier. Its revenue has been growing, with the revenue moving from $114 million a decade ago.
Most importantly, the company has been highly profitable in the past few years. Its net income rose to $221 million in the third quarter from $200 million in the same period last year.
Therefore, the Trade Desk stock price crashed as investors remained concerned about its revenue growth. Indeed, it made two major down gaps after publishing its earnings this year. For example, TTD dropped from $121 to $85 in a single day in February when it released its results.
The stock then jumped from $59.6 to a high of $75 after releasing its earnings in May. Finally, it plunged from $88 to $56 in a single day after releasing the earnings.
TTD stock also suffered a harsh reversal as investors booked profits, as it was one of the top gainers in the S&P 500 Index in the previous year. Also, it came under short-seller attack as the short interest soared to 10%.
READ MORE: Trade Desk has fallen steeply after S&P 500 inclusion: what should you do with the stock?
Is TTD a good stock to buy?
Wall Street analysts are highly bullish on the Trade Desk stock, with the average target being $61, higher than the current $38.33. Some potential catalysts may trigger a rebound in the coming year.
First, analysts are upbeat about the company’s earnings growth in the coming year. The average estimate is that the revenue will jump to $840 million from the $741 million in the same period last year. This revenue will bring the annual revenue to $2.90 billion, up by 18% from 2024.
The Trade Desk is expected to make $3.335 billion, up by 16% year-on-year. Its earnings-per-share is expected to move from $1.78 this year to $2.08 in the coming year.
Second, there are signs that the company has become a bargain, with its forward price-to-earnings (P/E) ratio coming in at 21, much lower than the five-year average of 69%. The rule-of-40 metrics show that the company is nearing the key level at 40.
The Trade Desk share price analysis
TTD stock chart | Source: TradingView
The weekly chart shows that the TTD stock price has crashed from the year-to-date high of $141 to the current $38.31. It recently moved below the important support level at $38.7, its lowest point in July 2022.
The stock has plunged below the 50-week and 100-week Exponential Moving Averages (EMA). On the positive side, it has formed a giant double-bottom pattern whose neckline is at $141.
Therefore, a contrarian case for the stock can be made. If this happens, the stock will likely rebound and hit the psychological point at $50 as investors buy the dip.
READ MORE: Crashing Trade Desk stock is at risk as a death cross nears
The post Trade Desk stock dropped 68% in 2025: Why was it the top S&P 500 laggard? appeared first on Invezz
