Stock Story -
What Happened: Shares of advertising software maker The Trade Desk (NASDAQ:TTD) jumped 9.2% in the morning session after the company reported second-quarter earnings results. The Trade Desk improved its gross margin this quarter. Notably, sales grew 26% year on year, driven by solid performance across its key operating segments, including connected TV, retail media, and identity. Moving on, next quarter's revenue guidance came in higher than Wall Street's estimates. Overall, this was a sloid quarter for TTD.
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What is the market telling us: The Trade Desk's shares are very volatile and over the last year have had 15 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago, when the company dropped 10.4% as major indices declined, with the Nasdaq down 3%, while the S&P 500 fell by 1.7% following weaker-than-expected earnings from Alphabet (NASDAQ:GOOGL) (YouTube Advertising revenue missed estimates) and Tesla (NASDAQ:TSLA) (7% drop in auto revenue). Tech giants, including Microsoft (NASDAQ:MSFT), Alphabet, Meta (NASDAQ:META), and Apple (NASDAQ:AAPL), have shed some of their year-to-date gains as a new market narrative—in favor of small-caps stocks—gains some momentum following the growing conviction that the Fed will start to cut rates in the second half of the year.
The sentiment also benefitted from improved inflation prints, as the headline numbers edged closer to the Fed's 2% target. Overall, the shift suggests investors are finding more reasons to hold positions in risk assets, especially small caps that tend to be more volatile.
The Trade Desk is up 38.7% since the beginning of the year, and at $97.85 per share it is trading close to its 52-week high of $101.52 from July 2024. Investors who bought $1,000 worth of The Trade Desk's shares 5 years ago would now be looking at an investment worth $3,599.
![Why The Trade Desk (TTD) Stock Is Up Today](https://d68-invdn-com.investing.com/content/piccd43a8e7653bf584622957ec0b1e9be5.jpeg)