After Two Straight Earnings Dumps, The Trade Desk Ends Its Trilogy with a 39% Bezos-Directed Finale

“Ah sht, here we go again.”

It’s that time of year when The Trade Desk drops earnings, and Wall Street turns into the Grim Reaper from that hallway meme… gliding door to door with a scythe, except each door is labeled with one of TTD’s past stock prices… and the hallway carpet is soaked with the tears of investors bagholders.

After running up nearly 60% since last quarter’s report, the stock decided to celebrate by logging its worst single-day performance in history… down 39% yesterday. For context, that’s a bigger drop than the 33% wipeouts in both February and December, which were already impressive enough to earn a spot in the “Earnings Day Pain Olympics.” At this point, buying puts ahead of their earnings has become a strategy you could almost backtest (kinda joking… but also, how’s 3-for-3 in the last year looking to you?). So why did the market punish them so severely? That’s the interesting part… because on paper, the quarter looked perfectly fine. In fact, if Palantir or Meta had posted these exact numbers, the stock probably would have gotten a “nice job, champ” sympathy rally from investors (and maybe a 10-paragraph Seeking Alpha post about “undervalued AI exposure”). 

The Trade Desk beat both revenue and EPS estimates, reporting $694 million in sales (up 19% year-over-year) and $0.41 per share in earnings, which was a penny ahead of consensus.  As Ben Franklin once said, “a penny saved is a penny earned”… but Wall Street clearly saw it for what it was, just a penny. Guidance for Q3 came in at “at least” $717 million, representing 14% growth. Not fireworks material, sure, but hardly the sort of result that screams “launch this thing into the ocean with the rest of the garbage.”

As you can tell, the damage here wasn’t about the quarter itself… it was about everything orbiting around it. For starters, CFO Laura Schenkein announced she’s stepping down after more than a decade at the company. Her replacement will be Alex Kayyal, a board member with a background at Lightspeed Ventures and Salesforce Ventures. 

While Kayyal’s resume is solid enough, Wall Street never loves a surprise CFO transition, especially when it’s announced in the middle of an earnings release (it’s the equivalent of your pilot announcing mid-flight that they’re swapping with a guy who “once flew a simulator at Topgolf”... and then casually clarifying that it was, in fact, a golf simulator.). CFOs, in many ways, are the de facto air-traffic controllers of the executive suite… and a sudden exit always raises questions about succession, internal confidence, and whether something’s quietly leaking under the hood.

But the much bigger overhang has a name (cue the music) “Jeffrey… Jeffrey Bezos.” (Yes, the one from the song. And yes, he’s here to ruin someone else’s business model.)

It turns out, Amazon has been aggressively building its advertising business into an ad-tech Death Star. For instance, in Q2 alone, ad revenue climbed 23% to $15.7 billion. And it’s no longer just monetizing product searches on Amazon.com… their demand-side platform is now placing ads across the broader internet, including premium placements that were once The Trade Desk’s exclusive playground (think: “we used to own this beach, now Bezos has set up a tiki bar and is charging cover”). Wedbush analysts put it diplomatically when they said Amazon’s expansion “could erode The Trade Desk’s value proposition over time.” In other words: the moat is shrinking, and Jeff brought a bucket.

And the expansion isn’t hypothetical. Amazon has been locking in partnerships with Disney, Roku, and even the NBA to sell Prime Video ads. Combined with making ads the default on Prime Video (a feature request from exactly zero people), this positions them to dominate the connected TV ad market. And if you’re looking for a vote of confidence from Wall Street, here’s a big one: Morgan Stanley is already projecting Amazon could overtake YouTube in smart TV ad share by 2027… which, in tech years, is basically tomorrow morning.

CEO Jeff Green (not the NBA one), to his credit, didn’t flinch on the call. He argued that Amazon “isn’t a competitor” because The Trade Desk is an independent, media-neutral platform. Unfortunately analysts weren’t buying it, suggesting Green is either downplaying a clear threat or being flat out delusional (both are equally bad).

So essentially, when you line up Amazon’s full-court press with a few other stress points… like Trump’s looming tariffs making big brands think twice about ad spend, connected TV growth easing off the gas, and forward guidance that was more “lukewarm” than “hot as fire”... you start to see why yesterday’s sell-off hit so hard. This wasn’t the market overreacting to one headline… it was the trifecta of intensifying competition, a sudden CFO exit, and a guidance update that left investors extremely underwhelmed

For the year, The Trade Desk is now (checks notes) down 53%, compared to a 9% gain for the S&P 500. And, as if to twist the knife, the stock had only just been added to the S&P 500 last month… a debut that’s now aged about as well as a Dallas Cowboys preseason hype video. Speaking of which, their next earnings report is on November 10th. And while I’m not saying to build your portfolio around TTD puts, history suggests another post-earnings plunge wouldn’t exactly qualify as a surprise ending.

At the time of publishing this article, Stocks.News holds positions in Amazon and Disney as mentioned in the article.