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Why I Sold This Underperforming Growth Stock

Parkev Tatevosian, CFA•Sep 26, 2026

Summary

Parkev provides a critical update on his investment in The Trade Desk, noting that the stock has lost nearly 90% of its value from its all-time highs. The primary driver for this decline is the aggressive entry of Amazon into the digital advertising space; while Trade Desk charges fees of 15% to 20%, Amazon is offering similar services for 1% to 5%. This competitive pressure has led to a dramatic deceleration in revenue growth, which fell from double digits to just 3% in the most recent quarter.

Parkev highlights that Wall Street estimates and management forecasts are increasingly pessimistic, with revenue expected to decline by 12% and 18% in the coming quarters. Although Parkev calculates a current fair value of $22 per share, he emphasizes that he has been repeatedly revising this number downward as new data consistently misses expectations. He contrasts this 'downward surprise' trend with AI stocks like Nvidia and Micron, where performance consistently exceeds his estimates. Consequently, Parkev has downgraded his conviction to 'low' and is considering selling his remaining two-thirds position.

The Trade Desk (TTD): Parkev notes the stock is down over 66% year-to-date and faces structural challenges from Amazon's low-fee model. He sold 1/3 of his position around $13 (having bought at $44) for tax loss harvesting and expects revenue to shrink significantly in the near term. Parkev mentions that while the forward P/E of 12.5 looks cheap, the lack of growth makes it a risky hold.
Amazon (AMZN): Parkev identifies Amazon as the primary disruptor causing Trade Desk's decline by offering significantly lower fees to purchasing managers. He states that Amazon's entry is successfully pulling market share away from Trade Desk, despite management's claims regarding inventory quality. Parkev suggests that Amazon's platform is winning the battle for advertising budgets by putting the lucrative margins of competitors at risk.
Nvidia (NVDA), Micron (MU), Broadcom (AVGO): Parkev briefly mentions these AI stocks to illustrate a positive contrast in market trends. Unlike Trade Desk, Parkev finds himself revising his fair value estimates for these companies higher every month because their financial data continues to surprise to the upside. He uses these as examples of where capital might be better allocated compared to underperforming assets.

Mentioned Stocks

TTD
Sentiment: SELLAction: SOLD

Reasoning: Parkev sold 1/3 of his position for tax loss harvesting after the stock fell nearly 90% from its highs. Parkev cites intense competition from Amazon and a collapse in revenue growth (from 11.8% to 3%) as key reasons for his bearish outlook. He has downgraded his conviction to a low level and notes that revenue is expected to decline by 12% to 18% in the coming quarters. While he estimates a fair value of $22, he keeps revising it lower as data consistently misses expectations.

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