Why the Trade Desk Stock Soared Higher Today
What Happened
The Trade Desk (NASDAQ: TTD) saw its stock price rise over 10% during trading on Wednesday; it was still up 8.17%, or $49.78, at the close of trading. Overall, the Dow finished up 51 points, while the Nasdaq gained 184 points, or 1.58%.
One of the catalysts that sent the Nasdaq higher on Wednesday was a strong earnings report by Netflix (NASDAQ: NFLX) which posted better-than-expected revenue.
So what
The Trade Desk runs the largest independent demand-side platform (DSP) for digital ads. In short, it operates a platform where advertisers can create and manage ad campaigns across various channels -- mobile, on demand, etc.
Last week, Walt Disney (NYSE: DIS) signed a deal with The Trade Desk to automate ad campaigns across Disney properties. That sent the stock higher, but then it came tumbling back down a few days later when Netflix picked Microsoft (NASDAQ: MSFT) over The Trade Desk to run its new ad-supported tier.
Today's rise in The Trade Desk's stock price was likely due to being in the draft of Netflix's earnings. The streaming giant, which is a bellwether for the industry, beat revenue and earnings estimates. However, it also reported a subscriber loss of 970,000. While that may sound bad, it wasn't as bad as many analysts' expected.
Now what
Netflix's solid revenue numbers led all the major streamers and industry players higher, signaling that the damage caused by high inflation and a slower growing economy might not be as bad as initially thought by analysts.
Investors should be looking for more signs when Roku (NASDAQ: ROKU) reports earnings next Friday, July 28. The Trade Desk releases its earnings on Aug. 8.
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Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, Netflix, Roku, The Trade Desk, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool has a disclosure policy.
