The Trade Desk's Growth in Open-Internet Advertising Dependent on UID2 Adoption, Faces Competition in Connected TV Industry and Expensive Valuation.

The Trade Desk faces two key risks: ongoing operational challenges that could slow growth, and a valuation that leaves little room for error. The company's growth in open-internet advertising depends heavily on the adoption of its UID2 identity solution, and competition is intensifying in the connected TV industry. Despite a recent price correction, The Trade Desk's shares remain pricey, making it a risky investment for some investors.

The Trade Desk (TTD), a leading player in the advertising technology space, is facing two significant risks that could impact its long-term growth. The company's growth in open-internet advertising heavily depends on the adoption of its UID2 identity solution, while competition in the connected TV (CTV) industry is intensifying. Despite a recent price correction, The Trade Desk's shares remain pricey, making it a risky investment for some investors.

One key challenge for The Trade Desk is the ongoing operational hurdle posed by its UID2 identity solution. With third-party cookies being phased out by Google in 2025, The Trade Desk has promoted UID2 as an industry standard to enable targeted advertising while preserving user privacy. While adoption has been broad, with partners such as Walt Disney, Fox, Roku, and many publishers integrating UID2, it is far from guaranteed that UID2 will emerge as the universal standard. The success of UID2 is critical for The Trade Desk, as it underpins the company's ability to deliver targeted ads and maintain its competitive edge [3].

The intensifying competition in the CTV industry is another major risk. The Trade Desk faces stiff competition from established players and new entrants, all vying for a share of the growing CTV market. This competition could lead to increased costs and reduced margins, potentially slowing The Trade Desk's growth. Despite its recent price correction, The Trade Desk's shares remain relatively expensive, leaving little room for error. Investors should carefully consider these risks before making a decision to invest [3].

For investors looking for opportunities in the advertising technology space, it is essential to monitor The Trade Desk's progress in adopting UID2 and navigating the competitive CTV landscape. While the company's platform and track record make it a compelling investment, the risks outlined above should be carefully weighed.

References:

[1] https://www.ainvest.com/news/rise-ai-driven-influencer-marketing-accenture-32b-bet-superdigital-2508/
[2] https://variety.com/2025/tv/news/fcc-chairman-google-get-deal-done-fox-youtube-tv-1236499448/
[3] https://www.nasdaq.com/articles/thinking-buying-trade-desk-stock-here-are-2-risks-consider