$10,000 in The Trade Desk on Its First Trading Day Is Still Worth About $40,000. Can the Stock Recover Again?
Anyone who bought The Trade Desk (TTD +0.24%) on its first day of trading and hung on has seen the stock climb over 40-fold, then give most of it back. The ad tech company’s shares finished that first day, Sept. 21, 2016, at $30.10 — or around $3.01 adjusted for the 10-for-1 stock split in 2021.
At $3.01 a share, $10,000 bought around 3,322 shares. At the stock’s $12.23 close on Oct. 16, these shares are worth around $40,600. Put simply, the stake is still worth about four times what it cost, though the stock trades 91% below its December 2024 peak of $139.51.
At that peak, the same stake was worth around $463,000.
But the company held up on the way down, at least until this year. Actually, I think the most telling point is that The Trade Desk makes more per share now than it did at the peak.
Image source: The Motley Fool.
A decade of growth
The Trade Desk’s software lets brands and ad agencies bid on digital ad space automatically (what the industry calls a demand-side platform), and the climb was built on its results. Revenue in 2016 was around $203 million. By 2024, it was $2.4 billion, after rising around 36% a year on average. The company made a profit in every one of those years. And spending on its platform hit $12 billion in 2024, a record.
Even the 2022 sell-off didn’t break that pattern. The stock lost around half its value that year, but revenue rose about 32% year over year to $1.6 billion.
Shares went on to set their record two years later.
By then, though, investors were paying a lot for that growth. At $139.51, the stock traded at almost 230 times earnings, based on the $0.61 of earnings per share The Trade Desk had generated over the last 12 months. A price-to-earnings ratio like that arguably only made sense if fast growth kept going for many more years.
What did the crash take?
The first big drop came with a miss on the company’s own forecast. The Trade Desk had guided for fourth-quarter 2024 revenue of at least $756 million, and it reported $741 million. Shares fell 33% a day later, in February 2025.
Worse, the stock shed another 39% in a single session in August 2025, the largest one-day drop since it went public. The company had just said its CFO was leaving, and it guided for third-quarter revenue growth of at least 14% year over year, a slowdown from 19% growth in the second quarter.
Growth kept slowing after that. Revenue climbed 18% year over year in the third quarter of 2025, but only 3% in the second quarter of 2026. And for the third quarter of 2026, management guided for revenue of at least $650 million, around 12% below the year-ago quarter.
The stock even lost its spot in the S&P 500 (^GSPC +0.41%), which it had joined in July 2025. It went to the S&P SmallCap 600 on Sept. 21.
But profits have held up much better than the stock. Over the four quarters through June, The Trade Desk earned $0.84 a share, up from $0.61 at the peak. At $12.23, the stock trades at less than 15 times those earnings.
So most of what the stock gave back was its valuation. The price-to-earnings ratio dropped from almost 230 to below 15, even as earnings per share climbed around 38%. The newer issue is in the guidance, as a shrinking revenue line could eventually cut earnings too.
TTD The Trade Desk
$12.26+$0.03 (+0.24%)
NASDAQ · As of 4:00 PM ET 10/19/26
An S&P 500 fund did about as well
That $40,600 works out to an annual return of around 15% over a bit more than 10 years. But $10,000 put in the SPDR S&P 500 ETF Trust (SPY +0.42%) on Sept. 21, 2016, with dividends reinvested, was worth around $41,400 as of Oct. 16 — a nearly identical return.
The difference was the path. The S&P 500 fund never asked its owner to watch a $463,000 stake shrink to around $40,000, or to ride out two one-day drops of over 30%.
What does this say about holding a fallen growth stock? Mainly that the low entry price made the difference for a first-day holder. A buyer at $3.01 could weather a 91% fall and still quadruple their money.
A buyer at the peak, of course, would need the shares to climb around 11-fold just to break even.
And unlike in 2022, revenue probably won’t grow through this slump. Until management’s guidance shows growth again, I wouldn’t bet on this drop working out the way the 2022 one did.
