"From the start of 2020 through the end of 2024, shares of advertising technology (adtech) company The Trade Desk were up an impressive 352%, trouncing the comparable 82% return for the S&P 500. In fact, this market-trouncing performance helped land The Trade Desk a spot in the S&P 500 index earlier this year. However, 2025 has been rough for shareholders."
"Here's the kicker: The Trade Desk just released an artificial intelligence (AI)-powered version of its platform, called Kokai. Management said this new software is the "most significant platform upgrade to date, and one that represents a new frontier in digital advertising trading." When investors hear things like "most significant" and "new frontier," they expect it to serve as a catalyst for new growth. This is why they're so disappointed with The Trade Desk, saying that business is about to significantly slow down. It seems contradictory."
The Trade Desk's shares rose 352% from the start of 2020 through the end of 2024, outperforming the S&P 500's 82% return and earning inclusion in the index. In 2025 the stock plunged 63% year-to-date, becoming the worst performer in the S&P 500. The company reported Q2 2025 results and guided Q3 revenue of $717 million, implying 14% growth that matches only a COVID-era quarter. The Trade Desk launched Kokai, an AI-powered platform described as the most significant platform upgrade and a new frontier in digital advertising trading. Management expects all clients to adopt Kokai by year-end, creating a mismatch between lofty expectations and near-term slowed growth.
Read at The Motley Fool
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