Here’s Why The Trade Desk (TTD) Traded Down in Q1

Parnassus Investments, an investment management company, released the “Parnassus Mid Cap Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The Russell Midcap Growth Index fell 7.12% in the first quarter, starting with a continuation of the late 2024 rally but later experiencing a sharp decline. The Fund (Investor Shares) fell -9.98% (net of fees) in the quarter, compared to the Russell Midcap Growth Index’s -7.12% fall. Stock selection in Consumer Discretionary and Industrials contributed to the relative performance, while Communication Services and Health Care detracted. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Parnassus Mid Cap Growth Fund highlighted stocks such as The Trade Desk, Inc. (NASDAQ:TTD). Headquartered in Ventura, California, The Trade Desk, Inc. (NASDAQ:TTD) is a technology company that offers a self-service cloud-based ad-buying platform. The one-month return of The Trade Desk, Inc. (NASDAQ:TTD) was 4.64%, and its shares lost 25.19% of their value over the last 52 weeks. On July 3, 2025, The Trade Desk, Inc. (NASDAQ:TTD) stock closed at $74.41 per share, with a market capitalization of $36.568 billion.

Parnassus Mid Cap Growth Fund stated the following regarding The Trade Desk, Inc. (NASDAQ:TTD) in its Q1 2025 investor letter:

“The Trade Desk, Inc. (NASDAQ:TTD), a digital advertising technology platform, detracted after missing guidance for the first time since going public. While the company faces concerns over rising competition from Amazon, we maintain our conviction in the company’s leading technology and its independent platform.”

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A large array of computer screens and tech equipment representing the technology company’s self-service cloud-based platform.

The Trade Desk, Inc. (NASDAQ:TTD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held The Trade Desk, Inc. (NASDAQ:TTD) at the end of the first quarter compared to 63 in the third quarter. The Trade Desk, Inc. (NASDAQ:TTD) reported revenue of $616 million in Q1 2025, representing an increase of 25% from Q1 2024. While we acknowledge the potential of The Trade Desk, Inc. (NASDAQ:TTD) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered The Trade Desk, Inc. (NASDAQ:TTD) and shared the list of best NASDAQ growth stocks to buy for the next 3 years. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of TTD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.