MW The S&P 500's biggest loser this year is one of its newest arrivals

By Emily Bary

Trade Desk's weak stock performance exemplifies how a place in the S&P 500 isn't always a boon for new entrants

Trade Desk, which makes connected-TV ad-tech offerings, has seen its stock suffer this year.

Trade Desk Inc. hasn't made a good impression in its first few weeks as part of the S&P 500.

Shares of the advertising-technology company are down 33% since being named to the benchmark index on July 14 and off 38% since joining the S&P 500 SPX before the open on July 18. Trade Desk (TTD) is now the worst-performing stock in the index on a year-to-date basis, though a chunk of those losses came before gaining entry.

While a place in the S&P 500 is seen as a milestone for companies, it's not always a boon for their stocks. A look at roughly two dozen new S&P 500 entrants dating back to the start of 2024 shows that less than half were in positive territory a month after joining the index. The same is true when looking at one-week and three-month spans, according to Dow Jones Market Data.

The average performance for those new entrants was a 2.8% decline in the first month after joining the S&P 500. After three months, the average performance was a 2.9% gain in the first three months, with individual moves ranging from a 26% decline for Solventum Corp.'s stock (SOLV) to a 117% rise for Palantir Technologies Inc.'s stock (PLTR).

For context, the average gain for the S&P 500 over a rolling one-month period dating back to the start of 2024 was 1.8%. Over a rolling three-month period, the average rise was 5.3%.

Bernstein analyst Harshita Rawat took a broad look in a note published late last year, writing that stocks "tend to outperform meaningfully in the run up to S&P 500 inclusion announcement," with a 61% cumulative relative return in the year before the announcement, based on her analysis of data from 2010 to 2024. But six months out from the announcement, the average cumulative relative return was essentially flat.

Trade Desk, which offers advertising-technology tools for connected television and other industries, is dealing with some business-specific issues, namely a slowdown in growth that's expected to persist into the current quarter. A Jefferies analyst sees the company's growth trends as "concerning" in light of better performances from other advertising-industry players, noting that while Trade Desk's management has dismissed the notion of meaningful competition from Amazon.com Inc. (AMZN), "the competition for an incremental dollar has undoubtedly increased" in the advertising market.

Jefferies' James Heaney said he expects Trade Desk's stock to shed "the premium valuation it has held in recent years" of 30 or more times adjusted earnings before interest, taxes, depreciation and amortization. The stock suffered a record one-day plunge of 38.6% after last week's earnings announcement.

-Emily Bary

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August 15, 2025 08:22 ET (12:22 GMT)

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