The Trade Desk shares fall 5% following report on non-exclusive agreement with Walmart.

Shares of The Trade Desk are down 5% to $51.45 after The Information reported that a new arrangement between the ad tech company and Walmart is no longer exclusive. The report cites sources saying the deal, which was previously considered a key factor in The Trade Desk's growth, is now non-exclusive. This news may impact investor confidence in the company's future prospects.

Shares of The Trade Desk (NASDAQ: TTD) fell by 5% to $51.45 on Thursday after The Information reported that Walmart Inc. (NYSE: WMT) has modified its advertising partnership with the ad tech company. The new arrangement no longer requires advertisers accessing Walmart's shopper data to use The Trade Desk's tools, shifting from a four-year exclusivity clause that had been a key driver of The Trade Desk's growth [1].

The reported changes mark a significant shift in Walmart's strategy, potentially opening its valuable shopper data to rival platforms. This move comes at a time when The Trade Desk is already facing headwinds, including a 35% drop in shares last Friday following the company's forecast for slower third-quarter revenue growth [2]. CEO Jeff Green attributed part of the weakness to "ongoing tariff uncertainty" putting pressure on large advertisers [2].

The non-exclusive arrangement could diminish The Trade Desk's competitive edge in a sector where scale and first-party data are critical. The company has relied on its automated ad-buying expertise, particularly in streaming TV, to position itself against advertising giants like Amazon and Google [1]. Amazon has been actively courting marketers, reportedly offering incentives to draw clients from The Trade Desk [1].

In response to the reports, The Trade Desk pushed back on suggestions of a fracture in the collaboration, stating that its partnership with Walmart "has gone from strength to strength…[and] continues to expand" [1]. However, markets will be closely watching whether competitors can exploit Walmart's strategic flexibility to erode The Trade Desk's position.

For now, the combination of weaker guidance, macro headwinds, and loosening retailer ties has left The Trade Desk's stock near its lowest of the year. Despite these challenges, the company emphasizes innovation and growth in areas such as retail media and connected TV. The Trade Desk's fundamentals remain strong, with revenue and net income figures continuing to impress [3].

Investors should closely monitor the company's ability to maintain its competitive edge and adapt to the evolving market dynamics. The Trade Desk's fundamentals and growth prospects present an opportunity for investors to buy the stock at a discounted price, despite the recent market turmoil [3].

References:
[1] https://finance.yahoo.com/news/trade-desk-shares-drop-report-150538782.html
[2] https://ca.finance.yahoo.com/news/trade-desk-shares-drop-report-150806866.html
[3] https://www.ainvest.com/news/trade-desk-39-crash-creates-asymmetric-adtech-opportunity-2508/