The Trade Desk Faces Mounting Pressure from Amazon’s Ad Push

The Trade Desk US88339J1051

The competitive landscape for programmatic advertising is undergoing a significant shift, placing notable strain on The Trade Desk. Following a challenging 2025, which saw its shares lose nearly 68% of their value, the company has received another blow from analysts. Citizens JMP downgraded the stock to "Market Perform," citing an intensifying battle for market share where one competitor is increasingly prominent: Amazon.

Amazon is making an aggressive move into the demand-side platform (DSP) arena, leveraging what many see as a decisive advantage: access to one of the industry's most extensive retail media datasets. This vast repository of consumer information provides the e-commerce giant with superior capabilities for targeting and measuring the effectiveness of advertising campaigns.

However, data superiority is not Amazon's only tactic. Reports indicate the company is also engaging in price competition, undercutting The Trade Desk on fees. For certain deals, Amazon is allegedly charging rates as low as 1%, a clear bid to capture market share. In response, The Trade Desk has entered negotiations to lower its own fees for some clients, a defensive move that analysts warn could pressure its profit margins throughout 2026.

Broader Industry Headwinds Compound Challenges

Beyond the direct threat from Amazon, several structural industry trends are creating additional headwinds for The Trade Desk:

• Growth in open web advertising, excluding connected TV and digital audio, is decelerating.
• Walled gardens, including Google and Meta, continue to command a growing portion of digital advertising budgets.
• The rise of AI-powered search engines poses a risk of reducing traffic to publisher websites, which could subsequently dampen advertising expenditure in those channels.
• Generative AI is simplifying the ad-buying process, making it easier for advertisers to switch between different DSPs and thereby weakening the hold of established providers.

Diverging Views from Market Analysts

Recent developments have led to a split in analyst sentiment. Following Citizens JMP's downgrade, BofA Securities maintained an "Underperform" rating but reduced its price target to $40. In a more positive adjustment, MoffettNathanson upgraded its stance from "Sell" to "Neutral," assigning a $39 price target. Guggenheim remains bullish with a "Buy" recommendation, though it also trimmed its target price to $50.

The company's path forward appears heavily dependent on its strategic response to heightened competition. How effectively The Trade Desk navigates the dual pressures of competitive fee structures and protecting its margins will likely be the key determinant of its stock performance in the coming months.