Trade Desk Customers Buying Amazon Ads Is 'Not Troubling,' Says Bullish Analyst

Shares of Trade Desk Inc TTD moved sharply lower on Thursday on news of it losing share to Amazon.com Inc's AMZN demand-side platform (DSP),

Since Trade Desk is a pure-play DSP, it has "several structural advantages" compared to Amazon's platform, according to Needham.

The Trade Desk Analyst: Analyst Laura Martin maintained a Buy rating and price target of $84.

The Trade Desk Thesis: While the company specializes in brand building and reach-related ads for the world's largest advertisers, Amazon focuses on buying-related ads for medium-sized businesses, Martin said in the note.

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Trade Desk's clients buying performance ads on Amazon "is normal, not troubling," she added.

Moreover, the analyst mentioned some structural advantages of Trade Desk's ads:

• Customers from the largest ad categories, like e-commerce, offline retail, and GenAI, consider Amazon a competitor and would not want to share their data.
• Unlike Amazon, Trade Desk supports buying ads on every device, across every category, at scale.
• Trade Desk uses data across 10,000 websites to optimize returns, while Amazon provides comparison only on its own site.
• Amazon has financial motivations to send customers' ad dollars to its owned media properties like its e-commerce platform and Prime Video, even if it means lower returns. "TTD’s core value proposition is its independence," she wrote.

Referring to Trade Desk's latest share price decline, Martin said, "We are buyers of TTD on this weakness."

TTD Price Action: Shares of Trade Desk were down 0.22% to $70.96 at the time of publication on Friday.

• The Trade Desk Stock Drops As Advertisers Shift To Amazon

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