What is Driving Trade Desk's Rapid CTV and Retail Media Growth?

The Trade Desk, Inc.’s TTD surge in connected TV (CTV) and retail media is being propelled by a powerful alignment of industry transformation, advertiser expectations and platform innovation. In third-quarter 2025, the company’s revenues increased 18% year over year to $739 million. This came above the company’s revenue expectation of at least $717 million. This outperformance was driven primarily by the exceptional strength of CTV, which once again stood out as the company’s fastest-growing channel.

The transition toward biddable CTV continues to gain momentum, and decision CTV is increasingly poised to become the dominant buying approach in the future. Compared with traditional programmatic guaranteed or insertion-order methods, decision-based buying delivers far greater flexibility, control and measurable performance, making it an increasingly clear and compelling choice for advertisers.

Retail media is undergoing a similar acceleration, fueled by rising demand for measurable, lower-funnel outcomes. Retailers are embracing Trade Desk as a partner because the platform seamlessly integrates retail data with identity solutions like UID2, enabling precise targeting and attribution across the open Internet. As shopper-marketing budgets flow into programmatic channels, brands are prioritizing environments where they can connect consumer behavior directly to business results. Trade Desk’s AI-enhanced Kokai platform strengthens these efforts by optimizing everything from impression valuation to supply path selection. Advertisers using Kokai are seeing significant improvements in efficiency and reach, reinforcing the platform’s role in capturing retail media growth.

Behind both CTV and retail media momentum lies the company’s broader ecosystem strategy. Innovations such as OpenPath, OpenAds and Deal Desk are reshaping supply chains by improving transparency, elevating auction integrity and helping publishers appropriately price premium inventory. With expanding global adoption and deepening strategic partnerships, the company is poised to sustain its rapid trajectory well into 2026 and beyond.

However, higher expenses and macro-economic uncertainty remain a concern. Moreover, TTD faces intense competition from Magnite, Inc. MGNI and Amazon.com, Inc. AMZN.

Taking a Look at MGNI & AMZN’s Efforts to Drive Growth

Magnite is a supply-side platform that helps publishers manage and sell their ad inventory across various formats like streaming, online video, display and audio. In the third quarter of 2025, the company posted revenues of $179.5 million, up 11% year over year. Magnite once again surpassed overall revenue expectations, delivering a standout performance in CTV with 18% growth or 25% when excluding political spend. This momentum is being fueled by strong contributions from its largest publisher partners as well as solid engagement across agencies and DSPs. Within CTV, ClearLine, buyer marketplaces and live sports continue to be key areas of strength. MGNI highlighted SpringServe (CTV ad serving and SSP platform) as a critical differentiator as it plays a key role as the "mediation layer for publishers".

Amazon's AI initiatives are gaining significant momentum, representing a strategic priority across the company. The company launched Project Rainier, a massive AI compute cluster containing nearly 500,000 Trainium2 chips specifically designed to build and deploy Anthropic's Claude AI models. Trainium2, Amazon's custom AI chip, saw continued strong adoption and grew 150% quarter over quarter, becoming a multi-billion-dollar business that is now fully subscribed. In Amazon Bedrock, the company added new foundation models, including those from OpenAI, DeepSeek and Qwen3, as well as Anthropic's latest Claude models. In third-quarter 2025, net sales rose 13.4% year over year, ahead of management’s guidance of $174-$179.5 billion, driven by solid momentum across the North America and International segments, alongside strong growth in the Amazon Web Services segment.

TTD Price Performance, Valuation and Estimates

Shares of TTD have lost 23.4% in the past month against the Internet – Services industry’s growth of 9.3%.

In terms of forward price/earnings, TTD’s shares are trading at 32.76X, higher than the Internet Services industry’s ratio of 26.45X.

The Zacks Consensus Estimate for TTD’s earnings for 2025 has been marginally revised upward over the past 60 days.

TTD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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