Trade Desk (TTD) is on track to end this year as the worst-performing S&P 500 Index ($SPX) stock – and a Jefferies analyst warns 2026 is unlikely to be particularly exciting for the ad-tech firm either.
According to James Heaney, TTD shares face a “double whammy” next year: rising costs and AI threats that make it increasingly difficult to recommend owning them at current levels.
At the time of writing, Trade Desk stock is down nearly 70% versus the start of 2025.
Heaney believes Trade Desk must invest aggressively on infrastructure and engineers to remain competitive in the AI era.
However, since its sales are unlikely to grow in tandem, profit margins run the risk of contraction, making it super challenging for TTD stock to recover in 2026.
Last week, the Jefferies analyst maintained his “Hold” rating on the Nasdaq-listed firm, but lowered his price target to $40, indicating potential for less than 10% upside from here.
From a technical perspective, Trade Desk sits decisively below its major moving averages (MAs), reinforcing that bulls are unlikely to step in in the near term.
Jefferies recommends caution on Trade Desk shares also because artificial intelligence could prove a major headwind for them in the long run.
TTD currently serves as a sophisticated middleman that helps brands buy ads across the internet.
But as AI tools continue to evolve, they may eventually enable big brands or agencies to buy those ads directly from platforms like Disney (DIS), Netflix (NFLX), or Google (GOOGL) – without needing Trade Desk.
And if you believe Trade Desk could go obsolete over the next five years because of AI, you should not pay a premium for its stock today, Heaney told clients in his latest research note.
Other Wall Street analysts, however, disagree with James Heaney on TTD shares.
According to Barchart, the consensus rating on Trade Desk stock currently sits at “Moderate Buy” with the mean target of about $62 indicating potential upside of more than 65% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
