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Today's Featured Content
The Trade Desk: Down 75%, But a Reversal May Be NearAuthor: Sam Quirke. First Published: 4/25/2026. 
Key Points
- Shares of The Trade Desk have collapsed more than 75% since last summer, and sentiment has fallen close to rock bottom.
- The stock’s short interest is now above 11%, creating the conditions for a potential squeeze if momentum can flip.
- With earnings fast approaching and expectations low, the risk-reward setup is looking unusually attractive.
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Shares of The Trade Desk (NASDAQ: TTD) are trading around $23 after bouncing off the $20 level earlier this month. While that rebound is encouraging, it barely scratches the surface of the damage sustained in recent months. The stock remains down about 75% from its 52-week high last August and down nearly 85% since December 2024, making this one of the more severe downtrends among large-cap names right now.
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For existing shareholders, it’s been a painful ride. For those on the sidelines, however, the setup is starting to shift from painful to interesting. The big question is whether this is just another short-term bounce or the early stages of something more meaningful. Several factors suggest it could be the latter, so let’s take a closer look. A Perfect Storm of Negative SentimentThe rise of artificial intelligence has been a major driver of the downtrend, sparking concerns that parts of the digital advertising ecosystem could face significant disruption. While The Trade Desk is a prominent player in programmatic advertising, it lacks the scale and resources of firms like Alphabet (NASDAQ: GOOGL) to absorb or counter that threat. Company-specific issues have added to the pressure. Questions about fees charged to large clients have surfaced, with some customers voicing concerns. At the same time, broader macro headwinds—including geopolitical tensions related to Iran—have weighed on advertising budgets and prompted lower earnings forecasts. The result is sustained negative sentiment that has erased TTD’s gains from the past six years. Extreme Bearishness Is Creating OpportunityIt’s perhaps understandable that The Trade Desk ranks among the most heavily shorted large-cap stocks, with more than 11% of its float sold short. But that bearishness is also what makes the setup more interesting. High short interest doesn’t guarantee a squeeze, but it does create the potential for one if the narrative begins to shift. Consider Avis Budget Group (NASDAQ: CAR) — the short-squeeze-fueled 584% rally it produced this month illustrates that potential. At the same time, expectations for The Trade Desk have been reset and sit very low. Pair that with a valuation that’s becoming increasingly attractive, and the potential downside appears limited relative to the upside. Recent analyst sentiment is tilting positive. The team at UBS Group reiterated its Buy rating this week and set a $31 price target, roughly 30% above current levels. While that target isn’t in Avis-level territory, it would still represent meaningful upside and could help break the multi-month downtrend. Meanwhile, the consensus price target implies even more upside — greater than 78% over the next year. Early Signs of a Technical TurnTechnically, there are signs that selling pressure on TTD is easing. So far this year, the stock has shown a tendency to hold the $20 level, which is beginning to act as key support. Its Relative Strength Index is also rising sharply from deeply oversold territory, suggesting the aggressive selling seen recently may be fading. This kind of price action often signals quiet accumulation, where buyers step in before sentiment visibly turns. It’s still early, but that pattern is something bulls will watch closely. If TTD can build on this bounce and avoid slipping back below $20 ahead of next month’s earnings report, the breakout potential would grow. Earnings Could Be the CatalystHeading into the company's Q1 2026 report, it’s worth noting that The Trade Desk has delivered headline beats in each of its last three quarters, suggesting the business may be holding up better than the stock price implies. Continued outperformance could force short sellers to reconsider their positions. Even modestly better-than-expected results could trigger short-covering, which would drive prices higher and prompt additional short exits. That said, it’s important not to get ahead of ourselves given the risks already discussed. If The Trade Desk disappoints or reinforces concerns about growth, the downtrend could resume. But after such a steep selloff, the risk/reward profile is increasingly tilted in favor of the bulls. |
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