What Happened?

Shares of digital advertising platform The Trade Desk (NASDAQ: TTD) fell 7.9% in the morning session after Morgan Stanley downgraded the stock and significantly lowered its price target. 

The investment bank changed its rating on the advertising technology company to "Equalweight" from a more bullish "Overweight." Alongside the downgrade, Morgan Stanley also slashed its price target on the shares to $50 from a previous target of $80. Such a notable revision from a major Wall Street firm suggests a more cautious view on the company's future performance, which often prompts a sell-off from investors. This action indicates that the analyst sees less upside potential for the stock in the near term.

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What Is The Market Telling Us

The Trade Desk’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 13 days ago when the stock gained 4.3% after an analyst note eased investor concerns about its relationship with a key client, Walmart. Investment firm Stifel reiterated its Buy rating and $90 price target on the digital advertising company following meetings with its executives. The firm's note clarified that The Trade Desk "has not lost exclusivity at Walmart and remains the sole DSP provider for Walmart in the U.S.," with the only change occurring in Mexico. This news provided a boost to the stock, which has been under significant pressure recently.growth.

The Trade Desk is down 59.6% since the beginning of the year, and at $47.52 per share, it is trading 65.9% below its 52-week high of $139.51 from December 2024. Investors who bought $1,000 worth of The Trade Desk’s shares 5 years ago would now be looking at an investment worth $1,113.

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