The Trade Desk stock price had a $47 billion wipeout: buy the dip?

The Trade Desk (TTD) stock price has nosedived this year, erasing all gains made in 2024. It has slipped in the last five consecutive weeks and is hovering at its lowest level since March 2023. It is down by over 60% from its highest level this year, leading to a $47 billion wipeout as the valuation plunged from $70 billion to $23.8 billion.

Why The Trade Desk stock has crashed

There are a few reasons why the Trade Desk share price has imploded this year, becoming the worst-performing name in the Nasdaq 100 index.

The first reason is that The Trade Desk stock price surged in 2024 and was one of the top performers in Wall Street. It rose from about $60 in January last year and peaked at $141 in December.

In most cases, a stock that surges that hard during the year suffers a harsh reversal in the following year. All it needs is to report a weak quarterly result or have some negative news for this retreat to happen.

Some of the most popular companies that have gone through this are Super Micro Computer (SMCI), Celsius Holdings (CELH), and AppLovin.

In The Trade Desk’s case, the main trigger for this sell-off was its weak financial results released earlier this year. The results showed that its revenue rose by 22% in the fourth quarter to $741 million, bringing the annual figure to $2.44 billion.

Read more: Inside Trade Desk’s 2025 strategy: can it regain investor confidence?

TTD’s net income rose by 25% to $182 million as the net income margin jumped to 25% during the quarter. The company’s guidance was weaker than expected as it expects its quarterly revenue to be $575 million, lower than the average estimate of $580 million.

The Trade Desk share price has also crashed because of its valuation concerns. At its peak in 2024, the company had a market cap of over $70 billion. That is a big number for a company whose 2026 revenue is expected to be $3.47 billion.

In other words, the company had a forward 2026 price-to-sales multiple of 20, which is big. As such, the ongoing crash is because the company is going through a valuation reset, which is a popular situation, especially when recession odds are high.

The Trade Desk stock price technicals

The TTD share price has likely moved into the markdown phase of the Wyckoff Theory. According to the Wyckoff Theory, an asset goes through four key stages: accumulation, markup, distribution, and markdown phase.

The Trade Desk stock entered the markup phase of the Wyckoff Theory in 2024, which explains why it jumped to a record high.

It then moved into the distribution phase between December and early February. The corporate earnings triggered the markdown phase.

Looking ahead, the stock has crashed below the 50-week and 100-week Exponential Moving Averages (EMA), a sign that bears are in control. Also, the MACD and the Relative Strength Index (RSI) have continued falling. It has moved into the oversold level.

Therefore, the path of the least resistance for the Trade Desk stock price is bearish, with the next point to watch being at $38.8, the lowest swing in 2022. A move below that level will point to more downside, with the next level to watch being at $25.

A strong rebound cannot be ruled out once the ongoing panic selling ends. According to Yahoo Finance, the average Trade Desk stock price target among analysts is $111, up from the current $53.8.

The post The Trade Desk stock price had a $47 billion wipeout: buy the dip? appeared first on Invezz