Can Trade Desk's CTV Momentum Hold Off Rising Competition?

The Trade Desk’s (TTD) Connected TV (“CTV”) business is its “largest and fastest-growing channel” and continues to pace faster than the overall business. Video, including CTV, accounted for roughly half of revenues in the third quarter. The question now is whether CTV momentum will enable TTD to defend and increase its market share?

Unlike walled-garden platforms like Meta, Google and Amazon, which are focused on monetizing their own content ecosystems and first-party data, The Trade Desk positions itself as the buyer’s platform for the open internet. TTD had earlier referred to CTV as the “kingpin of the open internet.”

The Trade Desk’s strategy revolves around the open Internet, which is where price discovery and competition exist. Management noted that average consumers spend about two-thirds of their online time on the open Internet, but advertisers allocate far less than that proportion of their budgets.

On the last earnings call, management noted that the transition toward biddable CTV is gaining rapid momentum and it expects decision CTV to become the default buying model in the future. The benefits of decision-based buying (like greater flexibility, control and performance) compared with traditional programmatic guaranteed or insertion-order models, are rendering it the logical choice for advertisers.

The Trade Desk Price, Consensus and EPS Surprise

The Trade Desk price-consensus-eps-surprise-chart | The Trade Desk Quote

Technology investments are likely to amplify the tailwind. Kokai, TTD’s next-generation AI-powered DSP experience, remains central to its growth strategy. 85% clients use Kokai as their default experience and this is strengthening its competitive moat. TTD highlighted that Kokai delivered (on average) 26% better cost per acquisition, 58% better cost per unique reach and a 94% better click-through rate compared with Solimar.

Meanwhile, supply-side initiatives like OpenPath and OpenAds further strengthen its ecosystem by connecting advertisers directly to publishers, improving transparency and supply-chain efficiency.

International expansion, joint business partnerships and AI-driven optimization provide credible levers. But investors will watch whether CTV growth remains durable as macro budgets fluctuate and competition intensifies.

Amazon’s expanding DSP business is giving tough competition to TTD. Beyond big tech, independent ad-tech companies, such as Magnite (MGNI) and PubMatic (PUBM), are expanding their efforts and competing for CTV ad dollars.

How Are Competitors Ramping Up Their Growth Efforts

Like TTD, CTV remains PubMatic’s central pillar of growth, with revenues from CTV (excluding political) increasing nearly 50% year over year in the third quarter of 2025. Higher premium supply, the scaling of agency marketplaces, growth of small and mid-market advertisers and the live sports opportunity are driving the CTV momentum.

The company noted that buying activity for live sports grew more than 150% sequentially, driven by the scaling of their AI-powered live sports marketplace. PUBM also unveiled new programmatic guaranteed deals tied to major events such as the U.S. Open and Monday Night Football and is focused on increasing its CTV publisher footprint. PubMatic is integrating CTV more deeply into Activate, its direct-to-supply buying platform. It added pause ads in collaboration with Dentsu for CTV through Activate.

For Magnite too, CTV remains the key driver with deep partnerships with major publisher partners and agency marketplaces, along with momentum, particularly in live sports and SMB advertising. Netflix’s ad-supported rollout across global markets is pacing ahead of expectations and Magnite believes there is a meaningful opportunity for continued growth through 2026. CTV now represents a significant portion of Magnite’s mix, accounting for roughly 45% of total contribution ex-TAC.

Higher intake of its ClearLine platform, which now boasts more than 30 clients, is another plus. On the last earnings call, 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." Live sports is also powering MGNI’s CTV business. The company’s Live Stream Accelerator product is now used by several partners globally.

TTD Price Performance, Valuation and Estimates

Shares of TTD have gained 1% in the past month compared with the Internet – Services industry’s rise of 0.8%.

In terms of forward price/earnings, TTD’s shares are trading at 18.88X, lower than the Internet Services industry’s ratio of 28.67X.

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

TTD currently carries a Zacks Rank #2 (Buy). 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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