The Trade Desk Joins S&P 500 Index, Achieving 2,410% Gain Since IPO and Becoming a Buy for Wall Street

The Trade Desk, a programmatic advertising platform, has been added to the S&P 500 index. Since its 2016 IPO, the stock has soared 2,410%, outperforming the S&P 500's 190% gain. Despite a recent misstep, Wall Street still believes the stock is a buy, citing strong fundamentals and growth prospects. The company has a market cap of $20.5 billion, meets the S&P 500's criteria, and is one of only six companies to make the cut in 2025.

On July 18, 2025, The Trade Desk Inc. (TTD) will officially join the S&P 500 index, replacing ANSYS Inc. (ANSS), which is set to be acquired by Synopsys Inc. (SNPS) a day prior. This addition highlights the growing importance of ad tech in the digital advertising landscape. TTD's inclusion in the S&P 500 marks a significant milestone for the company, which has seen its stock price soar since its 2016 initial public offering (IPO).

Since its IPO, TTD shares have gained 2,410%, outperforming the S&P 500's 190% gain [2]. Despite a recent misstep in Q4 2024, where the company missed its own guidance for the first time in 33 quarters, Wall Street remains bullish on the stock. The company's strong fundamentals and growth prospects are cited as reasons for this optimism.

TTD operates a leading demand-side platform (DSP), which helps advertisers focus on data-driven ads. The company aims to achieve continued revenue growth and profitability, as well as expansion of its Connected TV (CTV) offering, wider adoption of its flagship products, including Kokai, Unified ID 2.0, and OpenPath, alongside an increased global footprint and partnerships. The global digital ad spending market is projected to reach $1,483 billion by 2034, at a CAGR of 9.47% from 2025 to 2034, positioning TTD well for future growth [1].

For the second quarter, TTD acknowledged the uncertain macro environment but remained upbeat, backed by strong Kokai demand and a solid international pipeline. It expects at least $682 million in revenue, implying 17% year-over-year growth, assuming stable market conditions. Adjusted EBITDA is projected to be around $259 million.

TTD faces competition from other S&P 500 constituents such as Amazon (AMZN) and Alphabet (GOOGL). While Amazon leverages its rich first-party data and owned platforms, TTD offers a neutral ad platform, giving advertisers broader reach. Google, on the other hand, leads with its all-in-one ad setup, but TTD targets the "open internet" [1].

From a valuation standpoint, TTD trades at a forward price-to-sales of 12.57X, higher than the industry's average of 5.44X [1]. The Zacks Consensus Estimate for TTD's earnings has remained unchanged over the past 60 days, and the company currently carries a Zacks Rank #3 (Hold) [1].

In conclusion, The Trade Desk's addition to the S&P 500 index underscores its significance in the digital advertising industry. Despite a recent setback, the company's strong fundamentals and growth prospects make it an attractive investment opportunity. As the digital ad market continues to grow, TTD's position in the market is likely to strengthen.

References:
[1] https://www.nasdaq.com/articles/trade-desk-stock-climbs-higher-sp-500-debut-ansys-drops-out
[2] https://www.fool.com/investing/2025/07/15/this-unstoppable-stock-just-joined-the-sp-500-it-h/