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Exclusive Article
The Trade Desk: Down 75%, But a Reversal May Be NearAuthor: Sam Quirke. Posted: 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 from recent months. The stock remains down about 75% from its 52-week high in August and 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 has been a painful ride; for those on the sidelines the setup is starting to look interesting. The big question is whether this is another short-lived bounce or the early stage of something more meaningful. There are several reasons to think it might be the latter, so let’s take a closer look. A Perfect Storm of Negative SentimentA key driver of the downtrend has been the rise of artificial intelligence, which has raised concerns that parts of the digital advertising ecosystem could face major disruption. While The Trade Desk is a significant player in programmatic ads, it doesn't have the resources to weather—or counter—AI-driven shifts the way companies like Alphabet (NASDAQ: GOOGL) can. Company-specific issues have added pressure more recently. Questions have emerged about fees The Trade Desk charges its largest clients, with some customers flagging concerns. At the same time, macro headwinds—including geopolitical tensions tied to Iran—have pressured advertising budgets and prompted lower earnings forecasts. As a result, relentless negative sentiment has erased TTD's gains over the past six years. Extreme Bearishness Is Creating OpportunityIt's understandable that The Trade Desk is now one of the most heavily shorted large-cap stocks—more than 11% of the float is sold short. But that positioning is also what makes the setup interesting. High short interest doesn't guarantee a squeeze, but it does create the potential for one if the underlying narrative shifts. Look at Avis Budget Group (NASDAQ: CAR) and the short-squeeze-fueled 584% pop it has produced this month to see the potential. Expectations for The Trade Desk have been reset to near rock-bottom. Combined with a valuation that looks increasingly attractive, the downside appears more limited relative to the upside. Recent analyst sentiment is tilting positive. UBS Group reiterated its Buy rating this week and set a $31 price target, roughly 30% above current levels. That alone could help break the multi-month downtrend. Meanwhile, the consensus price target implies an even more optimistic scenario, with more than 78% potential upside over the next year. Early Signs of a Technical TurnTechnically, there are signs selling pressure on TTD is easing. So far this year the stock has shown a clear willingness to hold the $20 level, which is establishing itself as a key support zone. Its Relative Strength Index is rising sharply from deeply oversold territory, suggesting the aggressive selling of recent months may be fading. That kind of price action often signals quiet accumulation, where buyers step in before sentiment visibly shifts. It's still early, but bulls will be watching whether TTD can build on this bounce and avoid falling below $20 ahead of next month's earnings report. Continued strength through earnings would be a meaningful sign of a more durable turnaround. Earnings Could Be the CatalystHeading into the company's Q1 2026 report, note that The Trade Desk has delivered beats in 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 some short-covering, which would push the stock higher and prompt additional shorts to buy shares to exit positions. That said, the risks discussed above are real and could still derail a recovery. If The Trade Desk disappoints or reinforces concerns about its growth prospects, the downtrend could resume. But given how much ground the stock has already lost, the risk/reward is increasingly tilted in favor of the bulls. |
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