Justin Pope, The Motley Fool

Sun, Jun 8, 2025, 5:30 AM5 min read

• The Trade Desk plays a valuable role in a digital ad space dominated by big tech companies.

• An expanding addressable market offers ample room for continued profitable growth.

• The stock's recent decline appears to be an opportunity, not a warning sign.

• 10 stocks we like better than The Trade Desk ›

Stock prices can do irrational things from day to day, or even for a few years. But if you look at more extended periods, you'll see that the market is pretty good at sniffing out winning and losing companies. That's why The Motley Fool recommends long-term investing.

So, when a stock, say, The Trade Desk (NASDAQ: TTD), returns over 2,300% since its initial public offering in 2016, investors can feel like that company is genuinely worth looking at more closely.

The technology company has continued to grow in a lucrative but highly competitive advertising space. Despite its long-term performance, The Trade Desk is down over 40% from its high. Is the stock still a long-term winner?

Here is whether investors should consider adding the stock to their portfolios today.

Advertising has been around forever, and for a good reason: It works. But an age-old industry is evolving. Advertising dollars are steadily shifting from newspapers, magazines, and broadcast television to the internet, where your online footprint generates data that companies can use to target you with ads they think you'll respond to.

Google (Alphabet) and Facebook (Meta Platforms) built trillion-dollar businesses on this trend. They act as gatekeepers in internet search and social media, a $500 billion market between both segments. These companies operate walled garden ecosystems, meaning they make the rules, keep the data, and give little control to advertisers.

As big and powerful as these walled gardens are, there are other opportunities in the digital advertising market -- in connected TV, online video, websites, smartphone apps, mobile web browsers, and internet audio. That's where The Trade Desk has thrived.

Its technology platform enables companies to purchase ad space, target their ads to their ideal audience, and track the results of their ad campaigns. It also offers more transparency and control than these walled gardens, a big deal to advertisers, as evidenced by The Trade Desk's success over the years.

Sustained, profitable business growth is the key ingredient for a winning long-term investment.