A Contrarian Bet: Cathie Wood’s Major Purchase in The Trade Desk Amid Steep Decline

While most investors have been fleeing, one prominent figure is moving in the opposite direction. Cathie Wood, through her investment firm ARK Invest, has made a significant purchase of The Trade Desk shares, seizing an opportunity presented by the advertising technology company's dramatic 70 percent share price collapse since the start of the year.

Market skepticism surrounding The Trade Desk is rooted in concrete challenges. Analysts point to intensifying competition, notably from Amazon's aggressive expansion of its own advertising ecosystem, which threatens to erode The Trade Desk's market position. Concurrently, the company's growth trajectory is showing signs of deceleration. Revenue growth for the fourth quarter is now projected at approximately 13 percent, a slowdown that has concerned market observers.

Valuation remains a contentious point. Despite the severe correction, the equity continues to trade at a premium to the industry. A price-to-earnings (P/E) ratio exceeding 40 is viewed by many as unsustainable, particularly against the backdrop of moderating growth rates.

Wood's Strategy: Buying When Others Are Selling

This environment of pessimism is precisely where Cathie Wood's investment philosophy often comes into play. In a classic contrarian move, ARK Invest acquired over 200,000 shares valued at nearly $8 million for its exchange-traded funds, as revealed by recent trading data. This aligns with Wood's documented strategy of investing in what she terms "disruptive innovation" during periods of market disapproval.

Should investors sell immediately? Or is it worth buying The Trade Desk?

The timing of this accumulation is notable. The stock currently trades roughly 74 percent below its 52-week high. Wood's bet appears to be that the market's negative reaction is overblown and that the company can maintain its standing in the ad-tech sector.

A Divided Street and the Path Forward

There is little consensus on the stock's fair value. A stark divide exists among analysts: some discounted cash flow (DCF) models suggest the shares could be undervalued by about 50 percent, while bearish arguments contend that current valuation multiples cannot be justified by single-digit or low double-digit growth forecasts.

The coming period is likely to be crucial for determining a price floor. All eyes are now on February 10, 2026, when The Trade Desk is expected to release its quarterly results. This report will be a key test, revealing whether the company can defy the prevailing pessimistic forecasts or if Cathie Wood's recent investment was prematurely timed during an ongoing decline.

The shares showed minor stabilization at the week's close, finishing Friday at €34.42, partly buoyed by news of ARK's substantial purchase.