The Trade Desk sold off this morning on Walmart contract news. Per an article posted by The Information, Walmart renegotiated their programmatic ad contract to be non-exclusive. They’ll still work with TTD, but will also work with others like Amazon’s demand-side platform.
Importantly, while this was published today, it happened last year. That means the headwind is fully baked into Q3 guidance and their 2026 revenue growth acceleration forecast. Furthermore, a TTD spokesperson responded to The Information’s request for comment with “the relationship is going from strength to strength.”
I’ve spent the last few days chatting with industry contacts in programmatic advertising about this firm. There has been incessant TTD noise, so I wanted to collect other opinions to see how they mesh with my optimistic point of view. I’m always looking to challenge my own bull cases.
After chatting with these people, it’s clear that trust in Jeff Green and The Trade Desk has waned. They do not believe them when they say Amazon isn’t hurting their business. They do not believe them when they discuss being perfectly positioned to take more market share and grow for a very long time. They do not trust the 2026 acceleration.
While I don’t agree with this skepticism, I see where they’re coming from. Green has explicitly said “Amazon is not competition,” but they do seem to be competing for some budget. 2 of the last 3 quarters have underperformed vs. buy-side expectations, and that is a new trend for TTD. Until now, it has been a beat-and-raise machine. When that goes away for a stretch of time, analysts naturally have a harder time believing how amazingly positioned a company is.
At the same time, I do still trust this team. I’ve seen Jeff Green meet promise after promise for roughly a decade and I do think a heavy skew towards large auto and CPG companies is clearly hurting their business more than others. I strongly believe they de-risked this headwind in Q3 guidance. That’s macro and temporary… not structural. Furthermore, if you’ll recall, I shared an interview leadership did with RBC after that call. In it, they made it clear that the forward guide many were concerned about was sandbagged to make their new CFO’s first quarter easier.
I think TTD will deliver a strong Q3 performance and Q4 guide and I think that will begin to erode the narrative of “Amazon eating their lunch.” For a while, Alphabet was “eating their lunch” in the eyes of shareholders, and that never really came to fruition in terms of crippling competitive headwinds.
With all of that said, here’s where I’m at following these discussions:
I trust this team and company.
I respect the people I’ve spoken to who no longer trust this team or company.
I am satisfied with what I currently own. I am not looking to trim, and have no near-term plans to add.
I like the idea of holding what I own into the Q3 print. That report will go a long way in confirming whether I am right or not.
If things continue to look shaky for this company, I’ll likely cut the position in half. If things look great, I’ll entertain accumulating more shares at the right price.
If things continue to look bad during Q3 and Q4, I will be out.
It’s vital to never unconditionally love a stock or public company. These firms must consistently earn our time, money and attention. I think TTD will continue to do that. My mind is always open to that not coming to fruition. When the “facts change, I change my mind.” I will be watching very closely to gauge whether or not the facts are changing.
