Trade Desk (TTD) needs to show clearer proof that its "tough decisions" in 2025, such as its organizational upgrades, its move to a more brand-centric sales strategy, and its maturing product stack can boost growth amid increased competition, Morgan Stanley said in a Thursday note.

The company's recent results were mixed, with full-year billings growth of 12% and Q1 guidance lower than expected, Morgan Stanley analysts said. One of the positives was the 22% take rate, possibly benefiting from the adoption of Trade Desk's AI-powered buying tool Kokai and a low-single-digit percentage shift toward the decision programmatic business, the analysts said.

Trade Desk cited challenges in the consumer packaged goods and automotive sectors, which account for more than 25% of its business. These are being by impacted by factors such as macro uncertainty, tariff concerns, and consumer pressure, even up to Q1, the analysts said.

The company highlighted its competitive moats in technology, data, and objectivity, but major competition from Amazon's demand-side platform continues to loom as a threat, according to the note.

Morgan Stanley maintained the company's stock rating at equal-weight and lowered the price target to $30 from $42.

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