The advertising technology sector is experiencing significant upheaval as The Trade Desk, a prominent independent player, confronts an unexpected competitive challenge from e-commerce behemoth Amazon. Market sentiment turned sharply negative following Wednesday’s announcement of a strategic alliance between Amazon and Netflix that directly threatens The Trade Desk’s position in the digital advertising landscape.
Market Turmoil Following Partnership News
Investors reacted swiftly to news that Amazon’s Demand-Side Platform will begin offering premium advertising inventory on Netflix starting in the fourth quarter of 2025. The development triggered substantial selling pressure on The Trade Desk shares as market participants expressed concern that advertising budgets could increasingly migrate toward Amazon’s expanding ecosystem. The company’s stock experienced a pronounced decline during Wednesday’s trading session as the market digested the implications of Amazon’s strengthened position in the advertising space.
Wall Street Responds with Downgrades
Financial analysts moved quickly to reassess their positions on The Trade Desk following the announcement. Morgan Stanley reduced its rating on Wednesday from “overweight” to “equal weight,” reflecting increased caution about the company’s competitive positioning. This was followed on Friday by Jefferies analyst James Heaney, who issued a “hold” recommendation while highlighting specific concerns about Amazon’s growing media dominance and its potential impact on The Trade Desk’s access to premium advertising inventory.
The analytical community’s apprehensions appear well-founded given Amazon’s systematic expansion of its advertising capabilities through strategic partnerships. For The Trade Desk, which has built its reputation as an independent alternative to major technology platforms, this development represents a significant competitive challenge.
Should investors sell immediately? Or is it worth buying The Trade Desk?
Growth Challenges Compound Existing Concerns
This competitive pressure arrives at an already challenging moment for The Trade Desk. The company had previously disappointed investors with its August quarterly results, which included projections for slowing revenue growth. Its third-quarter guidance of at least $717 million suggests growth of just 14 percent—a notable deceleration compared to historical performance.
Particularly concerning for shareholders is that the Amazon-Netflix partnership specifically targets the connected television advertising market, which has been a crucial growth driver for The Trade Desk. Although The Trade Desk maintains its own relationship with Netflix, Amazon’s entry into this space significantly intensifies competition for advertising dollars.
The company’s upcoming quarterly results in early November will provide critical insight into whether The Trade Desk can withstand pressure from technology giants or if the era of independent advertising specialists is facing unprecedented challenges.
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