TTD vs. GOOGL: Which Ad-Tech Stock Reigns Supreme?

The Trade Desk (TTD) and Alphabet (GOOGL) are both major players in the programmatic advertising ecosystem. TTD operates a leading demand-side platform, while Alphabet dominates the digital ad space through its ecosystem. Both firms have exposure to connected TV and retail media trends. TTD is confident in its ability to outpace the market with initiatives like Kokai and UID2, while Alphabet's dominance and established ecosystem make it a strong competitor. However, increasing macroeconomic uncertainty and trade tensions may impact TTD's revenue growth.

The Trade Desk (TTD) and Alphabet (GOOGL) are both significant players in the programmatic advertising ecosystem. TTD operates a leading demand-side platform (DSP), while Alphabet dominates the digital ad space through its extensive ecosystem. Both companies have substantial exposure to connected TV (CTV) and retail media trends.

The Trade Desk

The Trade Desk recently joined the S&P 500 index, which has driven its stock price upward. The company's inclusion in the index is a testament to its solid profitability and liquidity over the past four quarters. The addition to the index has also led to increased demand for the stock from passive investors and index funds [1].

The Trade Desk's recent rally has brought its price-to-earnings (P/E) ratio to 97, which is nearly triple the Nasdaq-100 index's average earnings multiple. Despite this high valuation, the company operates in a fast-growing market driven by the rapid adoption of artificial intelligence (AI) tools. According to one estimate, the programmatic advertising market could grow by 10x between 2024 and 2033, generating $236 billion in revenue by the end of the forecast period [1].

The Trade Desk's growth is particularly notable compared to its larger competitors. In the first quarter of 2025, the company reported a 25% year-over-year increase in revenue, outpacing Meta Platforms and Alphabet's Google advertising business. The company's Kokai programmatic advertising platform, which is used by two-thirds of its clients, has delivered significant improvements in cost per unique reach and cost per acquisition [2].

Alphabet

Alphabet dominates the digital ad space with its extensive ecosystem, including Google Search, YouTube, Google Network, Google AdSense, and Google Ad Manager. The company's ad technology infrastructure integrates both DSP and supply-side platforms (SSPs), making it a formidable competitor in the programmatic advertising landscape [2].

Alphabet's ad revenues come from various sources, including Google Search, YouTube ads, Google Network, Google AdSense, and Google Ad Manager. The company's strong brand recognition and established ecosystem provide a solid foundation for its continued growth.

Comparison and Considerations

Both The Trade Desk and Alphabet have significant exposure to CTV and retail media trends, making them attractive investment opportunities. However, increasing macroeconomic uncertainty and trade tensions could impact TTD's revenue growth, particularly if macro headwinds persist into the second half of 2025. The company's heavy reliance on North America for revenue (88%) also limits its total addressable market expansion potential [2].

In contrast, Alphabet's dominance in the digital ad space and extensive ecosystem provide a more robust foundation for growth, despite the competitive nature of the industry. Alphabet's ginormous ad technology infrastructure and established brand make it a strong competitor in the programmatic advertising landscape.

Conclusion

Both The Trade Desk and Alphabet are attractive investment opportunities in the programmatic advertising ecosystem. However, investors should consider the potential impact of macroeconomic uncertainty and trade tensions on TTD's revenue growth. Alphabet's dominance and established ecosystem make it a strong competitor, but investors should also be aware of the intensely competitive nature of the digital advertising industry.

References
[1] https://www.nasdaq.com/articles/magnificent-tech-stock-soaring-after-joining-sp-500-should-you-buy-it
[2] https://finance.yahoo.com/news/trade-desk-vs-alphabet-ad-134300120.html