Cantor Fitzgerald’s Top Internet Stocks: Best Stocks To Buy According To $13.2 Billion Firm

12. The Trade Desk, Inc. (NASDAQ:TTD)

Number of Hedge Fund Holders In Q2 2024: 46

Share Price Target Upside: 5%

Cantor’s Rating: Neutral

Cantor’s Share Price Target: $110

The Trade Desk, Inc. (NASDAQ:TTD) is an advertising technology company headquartered in Ventura, California. It is one of the few new age advertising companies in the world, which is evident through the fact that The Trade Desk, Inc. (NASDAQ:TTD) targets social media and streaming devices through its platform. This provides the firm with considerable advantages stemming from the shifting nature of the media industry that has seen users shift their focus to streaming and internet based platforms as opposed to traditional media such as cable television. The Trade Desk, Inc. (NASDAQ:TTD) also has a notable presence in the market, as it counts big ticket and notable names such as Disney+ and Hulu through its UID2 platform. UID2 is another advantage for The Trade Desk, Inc. (NASDAQ:TTD), as it allows the firm to target the programmatic advertising market. This market is expected to have a compounded annual growth rate of 22.8% in the future to add additional tailwinds for The Trade Desk, Inc. (NASDAQ:TTD).

Rowan Street Capital mentioned The Trade Desk, Inc. (NASDAQ:TTD) in its Q2 2024 investor letter. Here is what the fund said:

“We have owned TTD for a little over 4 years now, opportunistically establishing a position in March of 2020 at a cost basis of $17.40 (split-adjusted). Since then, TTD has appreciated nearly sixfold, delivering an annualized return of approximately 55%. These are indeed remarkable results, but it’s important to recognize that this journey has been far from a smooth ride—much like many of our other investments. Since its public debut in 2017, the stock has experienced several significant drawdowns, with the most notable occurring in 2022 when it declined by over 60%.

As we have previously discussed in relation to our investments in Meta and Spotify, one would have to be comfortable with sitting through these dramatic drawdowns and keeping their emotions in check in order to realize the long-term rewards of compounding that this company had delivered.

Turning attention to the fundamentals of the business rather than gyrations of stock prices, the progress is very impressive as evidenced from the numbers below. Over the 4 years, revenues, operating earnings, and earnings per share have each grown at a rate of 30%+ annually. Our return from holding the stock has been even greater than that since we were able to opportunistically purchase the stock when it briefly traded at 10x revenues during the early days of the pandemic scare. The multiple has now recovered to 20x revenues, which boosted our returns.”