What Happened?
Shares of advertising software maker The Trade Desk (NASDAQ:TTD) jumped 17.4% in the afternoon session after the company reported strong first quarter 2025 results which significantly beat analysts' revenue and EBITDA estimates. Sales rose by 25% as more buyers adopted its open-internet tools like Kokai and identity tech such as UID2, now being used by major publishers across the globe. Looking ahead, Q2 guidance for revenue was roughly in line while EBITDA guidance beat. Zooming out, this was a strong quarter, especially considering the weak print last quarter that had investors worried.
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What The Market Is Telling Us
The Trade Desk’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for The Trade Desk and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 6% on the news that stocks extended their rebound, led by strong gains in the technology sector, as renewed optimism surrounding U.S.–China trade negotiations lifted investor sentiment.
Contributing to the bullish tone was a standout earnings report from enterprise software leader ServiceNow, which topped Wall Street's expectations on RPO, profit and earnings. More importantly, the company's remaining performance obligations (RPO), a key forward-looking metric for future revenue, gave investors confidence that enterprise customers were not pulling back spending amidst uncertain macro.
This optimism was further reinforced by solid results from Texas Instruments and Lam Research. Their performance was especially encouraging for semiconductor stocks, which had been under pressure due to their exposure to global trade tensions. These earnings results suggested that, despite macroeconomic uncertainties, demand in key tech verticals remained resilient.
The Trade Desk is down 40.2% since the beginning of the year, and at $70.38 per share, it is trading 49.6% 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 $2,305.
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