With TTD plunging 33% on tariff fears and earnings, Citigroup shifts to Neutral. Here’s what investors must know about the risks, recovery prospects, and the new $65 target.

The Trade Desk (TTD), a leading cloud-based advertising technology platform, has just been downgraded by Citigroup from Buy to Neutral following a dramatic post-earnings selloff. With the stock reeling from a 33% decline after CEO warnings about tariff impacts on major advertisers, this rating change arrives at a critical moment for growth-oriented investors in the digital ad space. Analyst upgrades and downgrades from major banks like Citigroup often serve as pivotal signals for institutional and investors alike, especially when they coincide with major price dislocations and sector headwinds.

Key Takeaways

• Potential Upside to New Target: At a current price of $59.21 and a new price target of $65, Citigroup’s downgrade still implies a modest 9.8% upside from here.

• Stock Performance: TTD has crashed 33% overnight, from $88.33 to as low as $59.21, after tariff warnings and a mixed earnings report—even as revenues rose 19% year-over-year.

• Recent News Impact: The plunge follows CEO Jeff Green’s caution on tariff uncertainty and large advertiser budgets, as reported by Reuters, and a Barron’s piece noting strong revenue but “in-line” earnings.

• Downgrade Context: Citigroup, a global leader in equity research, is signaling caution after a period of high volatility and sector uncertainty, applying their influential sector expertise.

Citigroup’s Downgrade in Context: Market Shock and Analyst Authority

The Analyst Move: Why Citigroup’s Call Matters

Citigroup, one of the world’s most influential investment banks, has moved The Trade Desk from Buy to Neutral and set a new price target at $65. This comes just hours after a violent selloff triggered by earnings and macroeconomic commentary. Citigroup’s equity research desk is widely followed by both institutional and retail investors; their sector specialists are known for deep dives into digital advertising and technology, making this downgrade particularly weighty. The timing—immediately after a major market shock—signals a recalibration of risk and return in a sector known for its volatility.

The Trade Desk: Business Model and Digital Ad Sector Dynamics

The Trade Desk is a programmatic ad tech company enabling ad buyers to manage digital advertising campaigns across platforms such as desktop, mobile, connected TV, and audio. It generates revenue via a usage-based model, charging clients for access to its cloud platform and for data-driven targeting tools. The company sits at the intersection of data, automation, and the migration of ad spend from traditional to digital channels—a secular trend, but one increasingly prone to cyclical and geopolitical shocks.

Revenue and Earnings Snapshot

• Q2 Revenue: $694 million (up 19% YoY, beating consensus)

• Adjusted EPS: $0.41 (in line with expectations)

• Business Health: Revenue growth remains robust, but margin expansion is challenged by macro headwinds and sensitivity in large advertiser budgets.

Sector Background

The digital ad sector is highly sensitive to both macroeconomic factors (like tariffs and trade policy) and shifts in technology (cookies, privacy, walled gardens). TTD’s position as an independent, demand-side platform is both a strength and a source of volatility as advertiser budgets fluctuate.

Stock Performance: A Year of Momentum Unraveled in One Session

TTD’s stock had spent much of the past year trading with upward momentum, reaching an annual high of $141.53 in December 2024. The average daily volume and volatility were both elevated, reflecting strong institutional participation. But the last 24 hours have seen extraordinary volatility:

• Price Drop: From $88.33 to $59.21 overnight—a loss of 33%, erasing months of gains.

• Technical Breakdown: The stock now trades well below both its 20-day SMA ($83.15) and EMA ($81.74), with RSI plunging to 30.5, indicating oversold conditions.

• Volume Surge: Trading volume spiked dramatically, suggesting heavy institutional repositioning.

The current price is now just 37% of its 52-week high, with sentiment and technicals both deeply negative.

What the New Price Target Means: Modest Upside, Much Higher Uncertainty

With TTD closing at $59.21 and Citigroup’s revised target at $65, the implied upside is 9.8%—a far cry from the 40-60% upside implied just one quarter ago. This suggests Citigroup sees the selloff as overdone in the short term, but is not confident enough in a rapid rebound to recommend aggressive buying. The Neutral rating signals a “wait-and-see” stance, with risk now skewed to both sides as macro headwinds and sentiment continue to play out.

“Shares of cloud-based ad tech firm Trade Desk fell by a third during premarket trading on Friday, after CEO Jeff Green warned about ongoing tariff uncertainty pressuring some of the world's largest advertisers.” – Reuters, Aug 8 2025

Why Did the Stock Crash? Recent News and Executive Commentary

• CEO Warning: Jeff Green’s remarks on tariff uncertainty and large brand advertiser caution triggered a wave of selling, as noted by both Reuters and The Motley Fool.

• Earnings Reaction: While revenue growth was strong, the “in-line” earnings failed to reassure investors, who had bid up TTD as a high-growth sector leader. Barron’s notes that the numbers were “ahead of expectations” for sales, but the bottom line did not impress.

• Investor Sentiment: Technicals now suggest the stock is oversold, but the fundamental debate centers on the duration and depth of macro advertising headwinds.

Deep Dive: Navigating the New Risk-Reward Landscape

Is the Selloff Overdone?

TTD’s 19% revenue growth in a tough ad market speaks to underlying business resilience. However, the sudden shift in tone from management regarding macro risks—and Citigroup’s immediate downgrade—suggest that uncertainty is likely to remain elevated over the coming quarters.

• Technical Oversold: RSI near 30 implies short-term technical bounce potential.

• Valuation Reset: The stock is now trading at a significant discount to its average VWAP for the year ($80.87), suggesting the market has sharply rerated growth expectations.

• Institutional Caution: The spike in volume and volatility signals large funds are reevaluating exposure, not simply retail panic.

Key Questions for Investors

1. How long will tariff and macro headwinds persist?

2. Will large advertisers return to spending as uncertainties clear, or is this a secular shift?

3. Does TTD’s technology platform retain its competitive advantage amid budget tightening?

What to Watch: Forward-Looking Catalysts

• Management Commentary: Next updates from TTD’s executive team will be crucial—watch for any shift in tone on macro risks or ad spend recovery.

• Sector Read-Through: As a bellwether for programmatic ad tech, TTD’s challenges may signal broader pressure across digital advertising platforms.

• Technical Recovery: If oversold conditions attract value buyers or short covering, watch for stabilization above $65—the new Citigroup target—as a sign of renewed confidence.

Conclusion: Caution Reigns, but Opportunity for Nimble Investors

Citigroup’s downgrade of The Trade Desk from Buy to Neutral is a clear signal that, despite the company’s long-term growth story, near-term risks have escalated sharply. The stock’s 33% plunge on tariff uncertainty and earnings disappointment has forced a fundamental and technical reset, with the new $65 target implying only modest upside from here. For investors, the current setup is one of heightened vigilance: the potential for a technical bounce exists, but macro and sector-specific risks mean the road to recovery could be bumpy and prolonged.

Bottom Line: This is a moment for patience and discipline—monitor management guidance, sector trends, and technical signals closely before making new commitments to TTD shares.