Why Are The Trade Desk (TTD) Shares Soaring Today

Kayode Omotosho /
2023/07/13 11:56 am EDT

What Happened:

Shares of advertising software maker The Trade Desk (NASDAQ:TTD) jumped 5.28% in the morning session after the company was added to three Nasdaq indexes that track the performance of the top 100 companies on the exchange. The Trade Desk will replace Activision Blizzard, a video game maker. Specifically, The Trade Desk will become a component of the Nasdaq-100 Index® (Nasdaq: NDX), the Nasdaq-100 Equal Weighted Index (Nasdaq: NDXE), and the Nasdaq-100 Ex-Tech Sector Index (Nasdaq: NDXX) before market open on Monday, July 17, 2023.

What is the market telling us:

The Trade Desk's shares are very volatile and over the last year have had 31 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was 3 months ago, when the company gained 5.67% on the news that competitor Meta reported impressive first-quarter results that surpassed analysts' daily active users (DAU), revenue, operating profit, earnings per share (EPS), and free cash flow expectations. Sales climbed in the first three months of the year, snapping a cycle of three straight quarters of revenue drops. Additionally, advertising revenue surpassed Consensus expectations, which was a positive read-through for the current state of the digital ad market. The Trade Desk, which is a programmatic platform enabling digital ad placement, is one of the potential beneficiaries.

The Trade Desk is up 103% since the beginning of the year. Investors who bought $1,000 worth of The Trade Desk's shares five years ago would now be looking at an investment worth $9,470.

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