Wedbush downgrades The Trade Desk, says OpenAI deal impact overestimated

Investing.com -- Shares of The Trade Desk may have rallied too far on optimism surrounding a potential partnership with OpenAI, according to analysts at Wedbush Securities, who downgraded the stock to Underperform in a note to clients on Friday.

Wedbush analyst Alicia Reese said the firm has cut its rating from Neutral after the stock surged about 18% following reports that The Trade Desk could help monetize advertising inventory tied to OpenAI’s ChatGPT.

Reese added that she does “not believe the incremental value of the rumored deal warrants the current share price,” arguing that the market has significantly overestimated the partnership’s near-term financial contribution.

The firm acknowledged that the deal could be strategically important in the long run, calling it “a vital long-term strategic move against AI search cannibalization.”

However, Reese cautioned that the rally reflects a “narrative-driven ‘headline pop’” rather than the underlying economics.

According to Wedbush’s estimates, the partnership would generate relatively modest financial benefits. Its analysis projects “expected incremental EBITDA of just $42 million in 2027,” while the nearly $2 billion jump in market value tied to the news implies “a ~53x EBITDA multiple.”

Revenue contributions also appear limited. Wedbush estimates The Trade Desk could capture between $31 million and $77 million in revenue in 2026 and $56 million to $140 million in 2027, representing only “1–4% of TTD’s projected revenue base.”

The bank also warned about longer-term structural risks, including potential disintermediation if OpenAI eventually develops its own advertising platform.

“As OpenAI matures, we anticipate it will inevitably build a proprietary, in-house DSP,” Wedbush argued.

Despite those concerns, the firm maintained a $23 price target on the stock.

You May Also Be Interested In

• US Eyes 7.5% China Overcapacity Tariffs Before Xi-Trump Talks - Bloomberg
• Citi maintains neutral stance on European equities despite rally
• Active options: NVDA TSLA AAPL MU INTC AMZN SPCX MSTR GOOGL AMD