What Happened?

Shares of advertising software maker The Trade Desk (NASDAQ:TTD) jumped 5% in the afternoon session after the company announced it is developing a new connected TV operating system (OS) called Ventura and plans to launch it as early as 2025. The Trade Desk intends to partner with smart TV original equipment manufacturers (OEMs) and other streaming TV aggregators to deploy Ventura. Some of the issues that The Trade Desk hopes to solve with the TV OS include "frustrating user experiences, inefficient advertising supply chains, and content conflicts-of-interest."

Overall, this move highlights a potential new revenue stream for The Trade Desk as it creates a new channel for the company to sell more ad inventory using its technology.

After the initial pop the shares cooled down to $123.75, down 0.1% from previous close.

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What The Market Is Telling Us

The Trade Desk’s shares are somewhat volatile and have had 12 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 12 days ago when the stock dropped 10.5% on the news that the company reported underwhelming third-quarter results, with revenue and EBITDA roughly in line with Wall Street's expectations. During the earnings call, management expressed concerns about budget constraints, hinting at potential difficulties in assessing the strength of consumers' purchasing power. This uncertainty has primarily impacted brands' ability to effectively target mid to low-income households, which are more price-sensitive and, therefore, harder to sell to. While the quarter had some key positives, the stock seemed to be priced for perfection and exceeding expectations, not in-line results.

The Trade Desk is up 75.4% since the beginning of the year, and at $123.75 per share, it is trading close to its 52-week high of $132.53 from November 2024. Investors who bought $1,000 worth of The Trade Desk’s shares 5 years ago would now be looking at an investment worth $5,146.

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