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Investing.com -- The Trade Desk (NASDAQ:TTD) stock fell 3.7% after Wells Fargo (NYSE:WFC) downgraded the advertising technology company due to increasing competitive pressure from Amazon (NASDAQ:AMZN)’s demand-side platform (DSP).
Wells Fargo analyst Alec Brondolo lowered his rating on The Trade Desk from Overweight to Equal Weight and reduced his price target to $68.00 from $74.00, citing Amazon’s recent partnerships with major streaming platforms.
The downgrade follows Amazon’s deals with Roku (NASDAQ:ROKU) and Disney (NYSE:DIS) announced in mid-June, which Brondolo indicated are "catalyzing advertiser plans to test Amazon DSP on non-Amazon inventory in 2026." These partnerships with two of the largest connected TV (CTV) publishers are eroding what was previously viewed as The Trade Desk’s advantage in CTV inventory availability.
A recent survey conducted by Wells Fargo revealed that among The Trade Desk customers, 50% indicated Amazon DSP was already taking "modest share" of non-Amazon CTV budgets, while 30% reported "significant share" shifts to Amazon’s platform.
Despite the competitive concerns, Wells Fargo believes The Trade Desk can still meet 2025 consensus estimates due to healthy programmatic industry spending and potential benefits from advertisers moving away from Microsoft (NASDAQ:MSFT)’s Xandr DSP, which is scheduled to shut down in March 2026. The analyst reduced revenue estimates for 2026 and 2027 by 2% and 5% respectively.