Cathie Wood’s Ark Buys 738K Trade Desk $TTD Shares After 39% Price Plunge

Ark Invest’s decision to acquire a substantial block of Trade Desk shares underscores a classic contrarian move, snapping up positions in a high-growth adtech player just as the market recoils from disappointing quarterly results. With the stock plummeting nearly 39% in a single session to close at $54.23, this purchase signals confidence in Trade Desk’s long-term trajectory despite immediate headwinds, aligning with the fund’s history of doubling down on innovative disruptors during moments of volatility.

The Earnings Backdrop Fuelling the Dip

The Trade Desk’s latest earnings report, released on 7 August 2025, revealed revenue of approximately $618 million for the quarter, marking a 26% year-over-year increase but falling short of the loftier expectations some analysts had pinned on the company’s expanding role in connected TV and programmatic advertising. Adjusted EPS came in at $0.39, beating consensus slightly, yet guidance for the next quarter—projecting revenue between $618 million and $623 million—sparked concerns over slowing momentum in a sector battered by macroeconomic uncertainties. This tempered outlook, against a backdrop of rising interest rates and advertiser caution, triggered the brutal sell-off, with trading volume surging to over 104 million shares, far eclipsing the 10-day average of 9.3 million. For context, this drop erased gains that had pushed the stock to a 52-week high of $141.53 earlier in the year, leaving it trading at levels not seen since late 2023, when it hovered around $43.

Historically, such post-earnings tumbles have often presented buying opportunities for growth-oriented investors. The Trade Desk’s trailing twelve-month EPS stands at $0.82, reflecting steady profitability amid investments in AI-driven targeting tools, but the forward P/E ratio of 28.1 suggests the market is pricing in robust expansion—analysts from firms like J.P. Morgan and Piper Sandler forecast EPS growth to $1.93 next year, implying a potential rebound if ad spending normalises. This purchase by Ark Invest appears to bet on that inflection, viewing the current valuation—down 39.8% from its 200-day moving average of $90.09—as an undervalued entry point into a company whose market cap has contracted to $26.5 billion from peaks above $60 billion in mid-2024.

Ark’s Pattern of Accumulating Trade Desk Shares

This latest acquisition fits neatly into Ark Invest’s playbook of aggressive accumulation in The Trade Desk, a stock that has featured prominently in their portfolios since at least 2023. Back then, amid a similar earnings-driven dip, Ark scooped up over $107 million worth of shares, capitalising on a temporary retreat that preceded a multi-fold rally. More recently, in February 2025, the fund added 317,000 shares as the stock traded around $80, a move that paid off handsomely during the subsequent surge to triple digits. Today’s buy, valued at roughly $40 million based on closing prices, amplifies that conviction, potentially increasing Ark’s stake in a company that represents a core holding across their innovation-focused ETFs.

What makes this timing particularly intriguing is the contrast with The Trade Desk’s operational strengths. The company has consistently grown its revenue at a compound annual rate exceeding 25% over the past three years, driven by its independent demand-side platform that avoids the conflicts plaguing walled-garden giants. Yet, the recent session’s carnage, with the stock dipping to an intraday low of $53.18, highlights investor skittishness over near-term guidance that implies only mid-teens growth—a slowdown from the 30%+ clips of prior quarters. Ark’s move here could be interpreted as a vote of faith in The Trade Desk’s ability to navigate this trough, much like their successful bets on other tech names during the 2022 bear market, where early accumulations yielded outsized returns as sentiment shifted.

Investor Implications and Broader Sentiment

For institutional investors eyeing The Trade Desk, Ark’s purchase serves as a potential catalyst to reassess the stock’s risk-reward profile. At a price-to-book ratio of 9.12 and with book value per share at $5.95, the valuation remains premium but justified by analyst models projecting 20-25% annual revenue growth through 2027, per consensus from Bloomberg data as of 9 August 2025. Sentiment from verified sources like Morningstar rates the stock as a “buy” with a fair value estimate of $95, citing resilience in digital advertising’s shift toward data privacy-compliant solutions—The Trade Desk’s UID2 initiative, for instance, positions it well against regulatory changes.

That said, not all views are bullish; some hedge fund sentiment, as tracked by TipRanks, shows a neutral tilt, with concerns over competition from emerging players and potential ad budget cuts in a recessionary environment. Ark’s hefty buy, however, tilts the narrative toward optimism, especially as the stock’s 50-day moving average of $76.90 now looms as a key resistance level in any recovery. If history rhymes, this could mark the bottom of a cycle, much like the 2023 dip that saw shares double within months. Investors might watch for follow-on purchases or ETF reallocations to gauge conviction, but the scale of this single-day addition—nearly three-quarters of a million shares—speaks volumes about perceived upside in a beaten-down name.

Navigating the Volatility Ahead

Looking forward, The Trade Desk’s path hinges on macroeconomic recovery and its execution in high-margin areas like retail media networks. Analyst forecasts from Goldman Sachs, updated post-earnings, maintain a “conviction buy” with a $110 target, modelling a return to 30% growth by mid-2026 as AI integrations boost efficiency. Ark’s investment thesis likely aligns with this, betting that today’s pain is tomorrow’s gain, even as the stock languishes 61% below its 52-week high. In a market where growth stocks have faced relentless pressure—witness the 29.5% drop from the 50-day average—this purchase exemplifies the dry powder deployment that has defined Ark’s strategy, turning market fear into strategic opportunity.

Data as of 9 August 2025, 00:20 UTC. Inspired by an X post from a market observer noting Ark Invest’s acquisition of 738,367 shares of TTD.

References

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