The Trade Desk (TTD): A Rebound After a 55% Drop — a New AI Advertising Cycle?

Background: The AI Era Is Restructuring Advertising's Power Balance

In the AI era, the core of competition in the digital advertising industry is shifting.

For the past two decades, power in online advertising has mostly rested with a handful of traffic platforms — Alphabet, Meta Platforms, and Amazon. Through a Walled Garden model, these companies simultaneously control traffic, data, and ad-delivery systems.

However, as AI and Connected TV (CTV) develop rapidly, a new power structure is emerging in the advertising market. The real focus of competition is increasingly shifting to the AI Decision Layer — the algorithmic system that decides "which ad gets shown, to whom, when, and where."

The Trade Desk is a key player in this layer. The company provides a programmatic advertising platform (DSP) that lets brands bid in real time to buy ads across the open internet, using AI systems to optimize delivery performance.

1. The Trade Desk: A Structural Company in a Depressed Market

Across the entire digital advertising industry, a 47% EBITDA margin is still extremely high profitability. However, the market's focus isn't on the past — it's on the future. The company is guiding for revenue growth of just ~10% in Q1 2026, below the roughly 20% growth rate it sustained for a long time. For a company viewed as a high-growth tech name, a slowdown like this often triggers a market re-rating.

2. OpenAI Partnership Rumors: A Potential New Gateway to AI Advertising

Recent media reports indicate OpenAI is in early talks with The Trade Desk about selling ChatGPT ads through its platform. If this partnership materializes, its impact could go far beyond what the market currently expects.

The reason: ChatGPT could become a new traffic gateway.

Over the past two decades, the main traffic gateways for online advertising have been search engines, social platforms, and e-commerce platforms. AI conversational platforms could create a fourth gateway.

3. The CEO's Large Share Purchase: A Strong Signal of Insider Confidence

Insider buying of this magnitude on the open market is uncommon and is typically read as: management believes the stock is undervalued by the market.

4. The Power Map of the AI Advertising Industry

In the AI era, the power structure of the digital advertising industry can be divided into three layers:

The Trade Desk's AI system, Kokai, is designed precisely for this AI decision layer. The future power structure of the AI advertising market may take the following shape:

The Trade Desk's strategic positioning is to become: the AI decision layer of the open internet.

5. CTV: The Biggest Structural Shift in Advertising

Connected TV (CTV) is currently one of the fastest-growing segments in digital advertising, spanning Netflix, Disney+, Hulu, and YouTube TV.

In the past, this budget flowed mainly to traditional TV stations. But in the streaming era, TV advertising is shifting toward programmatic trading. This means the TV advertising market is digitizing — and The Trade Desk sits right at the center of this transformation.

6. Short-Term Pressure: The Ad-Budget Cycle

The Trade Desk's biggest short-term challenge right now is the ad-budget cycle. In particular, CPG (consumer packaged goods) and the auto industry together account for roughly 25% of the company's business. Amid inflation and economic uncertainty, these brands have cut back some of their advertising budgets.

Another market concern is AI black-box decision-making. Many brands are starting to ask: why did the AI choose certain audiences? Is ad performance verifiable? Is delivery cost transparent? This is giving rise to a new demand: auditable AI advertising. The Trade Desk's strategy is to offer a transparent, neutral AI decision-making platform.

7. Three Long-Term Trends in the AI Advertising Market

8. The Next Advertising Market: AI Agents

The next stage of AI is agentic AI. Future AI may not just answer questions but directly complete tasks: searching for products, comparing prices, completing a purchase.

If AI agents become a new consumer gateway, ad formats could change. Brands may no longer buy "display ads" — they may instead buy recommendation weight. This would further strengthen The Trade Desk's role as an AI decision platform.

9. Valuation Scenario Analysis

The biggest question in the market right now is: can The Trade Desk return to high-speed growth?

Investment Conclusion: The Trade Desk's Long-Term Positioning

From an industry perspective, The Trade Desk's strategic positioning is very clear:

Become the AI advertising operating system for the open internet.

If this strategy succeeds, the company stands to benefit from three long-term trends:

• CTV growth
• The spread of AI advertising
• Expansion of the open-internet advertising market

The Trade Desk's earnings and the OpenAI partnership rumors point to a bigger industry shift: AI is redefining the advertising market.

Future competition will no longer be just a battle for traffic — it will be: a battle for AI decision-making capability.

In this competition, The Trade Desk is trying to become the core operating system of the open internet. If CTV and AI conversational platforms become new traffic gateways, the importance of DSP platforms could rise again. Whether this company succeeds over the next few years will depend on whether it can keep hold of decision-making power in the AI advertising era.

AI is redefining the digital advertising industry. This is also the key reason investors are re-evaluating The Trade Desk's long-term value.