Trade Desk (TTD) shares opened comfortably in the green on March 5 following reports that the firm has signed a strategic ad partnership with OpenAI. This deal will reportedly see OpenAI utilizing TTD’s “demand-side” platform to manage and scale advertisements across its massive ChatGPT user base.
Despite today’s surge, Trade Desk stock remains down about 20% versus its year-to-date high.
Why OpenAI Deal is Positive for Trade Desk Stock
The OpenAI partnership is largely bullish for TTD stock, as it cements the firm’s role as the operating system for the open internet’s ad market.
OpenAI, which is targeting $17 billion in consumer revenue this year, needs highly sophisticated independent infrastructure to monetize its 920 million users without building a complex ad-tech stack from scratch. In return, it will provide a massive new high-intent inventory source for Trade Desk’s buyers.
All in all, the OpenAI deal silences bears who feared artificial intelligence would disintermediate traditional ad-tech, proving instead that AI giants are beginning to see TTD as an essential partner.
Insider Confidence Warrants Loading Up on TTD Shares
Beyond AI hype, there’s reason for investors to believe the selloff in Trade Desk shares has gone a bit too far — or at least management seems to believe that. CEO Jeff Green spent a whopping $148 million this week to load up on 6 million company shares, which represents the largest insider buy in TTD’s history.
Financially, the company remains a powerhouse, with $2.9 billion in sales last year and a peer-leading 79% gross margin.
Moreover, Trade Desk is currently going for less than 20x forward earnings, a significant discount to its historic multiple.
Trade Desk Remains Buy-Rated Among Wall Street Firms
It's also worth mentioning that Wall Street analysts remain bullish on Trade Desk for the next 12 months.
According to Barchart, the consensus rating on TTD shares sits at “Moderate Buy” currently, with the mean target of about $36 indicating potential upside of more than 20% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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