Following outstanding displays in 2023 and 2024 that led to a two-year increase of 84.5%, the Nasdaq Composite It plummeted to 17,303.01 on March 13—a decline of 14.2% from its peak of 20,173.89 reached on December 16. This dip surpassed the 10% threshold, pushing the index into correction territory. Despite some minor gains recently, the Nasdaq Composite remains approximately 10% below its former high point.
It’s uncertain whether things will shift direction soon from this point onward. Nevertheless, history shows us that numerous instances of stock market downturns were often succeeded by robust rebounds. As per information compiled by Clearnomics and Standard & Poor's and interpreted by Covenant Wealth Advisors, markets typically plunge over a span of about five months before recovering within roughly four months on average. Even though previous patterns shouldn’t be relied upon to forecast what might happen next, they do provide insight into recurring tendencies.
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Given this circumstance, it might be an appropriate moment to put money into top-tier, economically stable firms that have robust competitive advantages and are currently being traded at reduced prices. An example of one such equity is The Trade Desk (NASDAQ: TTD) Its shares have dropped by approximately 52% in 2025 and are down by 60.2% from their peak reached in December.
Numerous factors suggest that this significant downturn might present a compelling opportunity for long-term investors with a tolerance for brief market fluctuations to initiate positions.
Temporary setback
The Trade Desk's outcomes for the fourth quarter were underwhelming as revenue failed to meet both the expectations set by financial analysts and the forecasts provided by company leadership. CEO Jeff Green pointed out that this shortfall in revenue was due to operational errors during a corporate restructuring effort in December. This initiative involved clarifying job duties, changing how information flows within the organization, and focusing more on improving internal efficiency and adaptability.
After the firm resolves these implementation challenges, the chance of reinstating its growth path stays strong.
Multiple tailwinds
The Trade Desk serves as a standalone demand-side platform (DSP) designed to assist advertisers in effectively placing their ads across multiple content platforms. By 2024, the firm had facilitated almost $12 billion worth of ad spend through its platform—over 1% of the total $1 trillion global advertising sector. This indicates substantial potential for further expansion within the marketplace.
Streaming television represents the firm's quickest-expanding ad category, contributing over 45% to their revenues during the final quarter. As more audiences transition from traditional broadcast TV to online platforms, the proportion of ads shown on connected TVs within the company’s overall income distribution is anticipated to increase significantly in upcoming periods.
In contrast to prominent rivals like Alphabet and Amazon , which have their own ad inventory and operate "walled gardens" in an effort to keep clients' spending within their ecosystems, The Trade Desk does not own any ad inventory. This allows it to focus solely on placing ads in a manner that is most beneficial and optimal for advertisers based on factors such as price and audience targeting.
Given that it doesn’t have any conflicting interests, The Trade Desk appears more transparent and impartial compared to its “walled garden” rivals. This enhances client confidence in their services. According to CEO Jeff Green, he anticipates that Google might ultimately withdraw from the open internet as a result of increasing antitrust concerns and regulatory scrutiny. He believes this could create fresh prospects for The Trade Desk.
Centering around objectivity, The TradeDesk is progressively developing a robust retail data ecosystem. This advancement allows advertisers to gain deeper insights into conversion rates and measure how their advertising expenditures influence consumer behavior more effectively.
The Trade Desk envisions substantial expansion possibilities within the audio sector, a space that CEO Jeff Green characterized as "currently offering some of the best deals available on the open internet." Numerous prominent figures in digital audio have embraced the firm’s Unified ID 2.0 (UID2) solution, an approach that operates independently from cookie-based advertising methods.
Ultimately, The Trade Desk was among the first to embrace artificial intelligence (AI) technology. By 2023, they had introduced Kokai, an AI-driven media purchasing tool that assists clients in making more informed decisions with enhanced data and signals, resulting in greater returns from their advertising investments.
Strong Financials
In 2024, The Trade Desk saw its revenue increase by 26%, totaling $2.4 billion. Additionally, the firm announced an adjusted EBITDA margin surpassing 41%, along with a cash flow above $630 million for the same year. Furthermore, The Trade Desk maintains a robust financial position, holding $1.9 billion in cash and short-term investments alongside minimal debt.
Valuation
The Trade Desk is currently trading at approximately 11.4 times its sales, which is below its historic price-to-sales ratio of 22.9. Although the firm’s price-to-earnings ratio stands at 72.2, making it seem quite high, this figure remains significantly under its five-year average of 125.2. Given the strong growth prospects ahead and its relatively low current valuation, investing in The TradeDesk seems like a prudent move right now.
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