Is This a Good Time to Invest in Trade Desk Shares as OpenAI Considers Advertising?

Trade Desk Stock Shows Signs of Recovery

After reaching a high of $90 in August, Trade Desk (TTD) shares have started to rebound. The stock previously declined due to slower revenue growth, mounting competition, and cautious forecasts. Another challenge comes from the rise of artificial intelligence (AI), as Trade Desk contends with major players like Alphabet (GOOG, GOOGL) and Meta's Instagram for advertising budgets.

Why Optimism Is Returning for Trade Desk

Despite recent volatility, there are compelling reasons to be optimistic about Trade Desk’s future. Notably, OpenAI is reportedly exploring a partnership with Trade Desk to expand advertising opportunities on ChatGPT. Should this collaboration come to fruition, marketers may find it easier to purchase ads on ChatGPT, potentially transforming it into a significant advertising channel rather than just a test platform. Integrating with established ad networks could allow ChatGPT to compete for ad dollars currently spent on social media and search platforms.

Related Stories from Barchart

Another positive signal comes from CEO, founder, and chairman Jeff Green, who recently invested $150 million of his own money into TTD shares. While this substantial purchase doesn’t erase all risks, it does indicate strong confidence from someone with deep insight into the company. Although AI is increasingly automating tasks within the industry, Green believes that as these systems expand, there will be a continued need for impartial platforms that offer trustworthy data—an area where Trade Desk excels.

“Let me explain why I’m so confident about the future: Trade Desk has been developing AI and machine learning solutions for over ten years, well before the current AI boom. Our platform is infused with AI, powering our bidding system, valuation tools, supply path optimization, predictive clearing, and our new Deal Desk. Kokai, our AI engine, can evaluate 20 million ad opportunities every second, each with thousands of variables, using both first- and third-party data in milliseconds to identify the best match for advertisers. We believe our AI capabilities and our comprehensive, reliable data platform are unmatched in the industry.”
— Jeff Green, on The Current

Wedbush analysts have recently downgraded Trade Desk to “underperform,” setting a price target of $23 per share. They caution that investors may be overly optimistic about the potential OpenAI partnership, noting that discussions are still preliminary and any agreement would not immediately boost revenue. Nevertheless, Green’s massive stock purchase is a strong vote of confidence, and it’s unlikely an insider would make such a large investment if they lacked faith in the company’s prospects. Additionally, Trade Desk has just approved a $500 million stock buyback, further signaling management’s positive outlook.

Analyst Opinions on Trade Desk

Among the 39 analysts tracking Trade Desk, 16 rate it as a “Strong Buy,” two as a “Moderate Buy,” 17 as a “Hold,” one as a “Moderate Sell,” and three as a “Strong Sell.” The average price target stands at $33.30, suggesting a potential upside of 21.4%. The most optimistic target is $70, which would represent a 155.2% increase from current levels. While Trade Desk still faces challenges such as slow growth, stiff competition from tech giants, and uncertainties around AI-driven advertising, several catalysts—including a possible partnership with OpenAI—could drive future gains.

With the recent $500 million buyback authorization and the CEO’s significant stock purchase, there are strong reasons for investors to be optimistic. Trade Desk may offer a compelling way to participate in the evolution of AI-powered advertising.