Trade Desk Pops on Possible OpenAI Deal-Game Changer or Headfake?

Advertising technology stock The Trade Desk (NASDAQ: TTD) has experienced highly disappointing performance recently, with shares down more than 50% over the past 52 weeks.

However, the stock recently received a significant shot in the arm, with shares surging more than 18% on March 5. This came on reports that The Trade Desk is in talks with OpenAI to help companies place advertisements in ChatGPT. Reports indicate that the potential partnership is in the early stages of negotiations.

The excitement related to even a possible partnership makes sense. ChatGPT now has 900 million weekly active users. If Trade Desk were to become one of OpenAI’s key partners, a flood of advertising dollars could potentially flow through its platform.

Let’s break down what this all really means and to what extent it changes the picture around TTD stock.

ChatGPT: TTD’s LLM Advertising Opportunity

When it comes to OpenAI, markets are increasingly concerned about the company’s ability to consistently generate revenue that exceeds its costs, i.e., to be profitable. Thus, the company has begun seeking additional avenues to accelerate revenue growth.

One of the key verticals it’s introducing is advertisements on ChatGPT. Specifically, in January, the company said that it plans to start testing ads in the United States in its free and Go tiers. Its Plus, Pro, Business, and Enterprise tiers will not include ads.

For Trade Desk, this represents a considerable opportunity. Trade Desk partners with companies looking to generate ad sales (such as OpenAI). When companies looking to place ads use TTD’s platform, it takes a percentage of their ad spend. The rest flows to its partners, which could include OpenAI.

In the context of this discussion, the partnership would be even more compelling when considering the stratification of OpenAI’s user base. Reports suggest that as of July 2025, only 5% of OpenAI’s users were on its Plus or Pro tiers. OpenAI also said in November 2025 that it had a total of seven million ChatGPT for Work seats. The numbers are imprecise, but the overall story holds: the vast majority of ChatGPT users are on the free and Go tiers.

Thus, for Trade Desk, a partnership with OpenAI could enable the firm to facilitate ad buying across a large portion of ChatGPT’s user base.

Criteo, Perplexity, and OpenAI: The Evolution of LLM Advertising

Adding weight to these rumors is the fact that OpenAI has already partnered with a company similar to Trade Desk: Criteo (NASDAQ: CRTO). Criteo is OpenAI’s first advertising technology partner, integrating with its ad push. Some of the early data from Criteo is promising.

The company says that when advertisers receive referrals from users through LLMs like ChatGPT, they convert at 1.5 times the rate of other channels. This means that advertisers get significantly more interest from potential customers when placing ads in LLMs. This creates a compelling reason for them to push ads through this channel.

Notably, Criteo is a much smaller ad-tech player compared to Trade Desk. The company says it activates over $4 billion in ad spending annually. This is less than a third of the $13.4 billion in gross spending that flowed through Trade Desk’s platform in 2025.

Thus, it’s possible that OpenAI is testing this arrangement with Criteo and seeing if it sticks. If successful, the firm could also begin working with larger players, such as Trade Desk.

Still, there is some reason to believe OpenAI’s advertising ambitions could prove untenable. Artificial intelligence (AI) search tool Perplexity recently reversed course on its advertising push, citing concerns that ads could reduce consumer trust in its platform. This is one of the key issues that OpenAI’s advertising ambitions face.

However, there is one key difference between ChatGPT and Perplexity: user base. Perplexity’s user base is in the “tens of millions," a fraction of ChatGPT’s. Larger user groups improve ad targeting, making ChatGPT a much more desirable platform for ad buyers.

ChatGPT’s larger user base also represents a much bigger opportunity for advertisers, making them more likely to buy on the platform. Furthermore, Perplexity is shifting its focus to enterprise adoption rather than consumers, while OpenAI is targeting both. With a massive consumer user base, OpenAI is less likely to abandon ads.

TTD: Beaten Down Stock Facing Significant Uncertainty Going Forward

At current levels, TTD’s valuation prices in long-term growth that is far below what it has historically generated. This isn’t entirely unwarranted, given that revenues rose by just 14% last quarter amid intensifying competition. This was the firm’s lowest growth rate in over five years, and a large drop compared to 22% growth in Q4 2024. Still, there is reason to believe that the market is too pessimistic about TTD’s outlook, especially if the OpenAI deal materializes.

The consensus price target on TTD sits near $43, implying over 50% upside. However, targets updated after the company’s latest earnings report are considerably lower, averaging around $34. This implies less than 20% upside compared to the stock’s current level near $29. There is substantial disagreement among analysts, with targets ranging from $17 to $55. Overall, despite the OpenAI potential, it remains difficult to be overly confident in Trade Desk’s future.

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