TLDR
- The Trade Desk stock dropped 12% after Netflix partnered with Amazon’s DSP platform for ad inventory access
- Morgan Stanley downgraded TTD from overweight to equal weight, cutting price target from $80 to $50
- The partnership strengthens Amazon’s position against The Trade Desk in the connected TV advertising space
- TTD has been the worst-performing S&P 500 stock this year with 60% decline year-to-date
- Analysts cite mounting headwinds and slowing growth as key concerns for the adtech company
The Trade Desk took a brutal hit on Wednesday, with shares falling 12% in a single trading session. The drop came after Netflix announced a new advertising partnership with Amazon that threatens TTD’s market position.
Netflix will now allow advertisers using Amazon’s demand-side platform to access its ad inventory directly. The partnership launches in the fourth quarter and covers several major global markets.
This deal puts Amazon’s DSP in direct competition with The Trade Desk’s platform. Both companies help advertisers buy and manage digital ads across various channels.
The timing couldn’t be worse for TTD shareholders. The stock has already lost about 60% of its value this year, making it the worst performer in the S&P 500.
Amazon has been aggressively expanding its advertising reach. The company signed a deal with Roku earlier this year and now works with every major streaming service.
Morgan Stanley Pulls Back
Adding salt to the wound, Morgan Stanley analyst Matthew Cost downgraded TTD from Buy to Hold. He also slashed his price target from $80 to $50.
Cost admitted he overestimated The Trade Desk’s ability to maintain its growth trajectory. He pointed to execution challenges and softness in the open web advertising market.
The analyst also highlighted rising competition in connected TV advertising. This segment has been a key growth driver for The Trade Desk in recent years.
Morgan Stanley’s research found that TTD charges roughly double the fees of rival platforms. This pricing gap is creating resistance among some clients.
Cost warned that another downgrade could come if trends don’t improve. He’ll be watching the next quarter closely for signs of a turnaround.
Walled Gardens Growing Stronger
The Netflix-Amazon partnership represents something bigger than just another business deal. It shows how major tech companies are building their own advertising ecosystems.
These “walled gardens” keep advertising dollars within their own platforms. Companies like Google and Meta have perfected this approach over the years.
The Trade Desk has built its business on being an independent alternative to these closed systems. But the walls keep getting higher as more companies team up.
Netflix’s ad-supported tier has been growing rapidly since its launch. This makes the streaming giant an attractive partner for Amazon’s advertising business.
The Trade Desk was already integrated with Netflix before this announcement. However, the Amazon deal still puts pressure on TTD’s competitive position.
For years, The Trade Desk seemed unstoppable in the programmatic advertising space. The company delivered strong growth quarter after quarter as digital advertising boomed.
But the landscape has shifted dramatically in 2025. Growth has slowed and competition has intensified from multiple directions.
The company’s valuation became a liability during this year’s sell-off. Investors who once celebrated TTD’s premium pricing are now questioning whether it’s justified.
Despite the recent struggles, Wall Street analysts remain mostly optimistic about TTD’s long-term prospects. The stock holds a consensus Strong Buy rating from 28 analysts.
That rating includes 14 Buy recommendations, 12 Holds, and just two Sells. The average price target of $72.63 suggests 57% upside potential from current levels.
However, those targets were set before Wednesday’s dramatic sell-off and the Morgan Stanley downgrade. Some analysts may revise their outlook in coming days.
The Trade Desk closed Wednesday’s session at $46.10, down from its 52-week high of $141.53 reached earlier this year.
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