What Happened?
Shares of advertising software maker The Trade Desk (NASDAQ: TTD) jumped 9.9% in the afternoon session after reports of its inclusion in the prestigious S&P 500 index.
S&P Dow Jones Indices announced that the digital advertising platform will replace ANSYS, which is being acquired by Synopsys, prior to the market opening on Friday, July 18. This milestone is significant because it will likely trigger substantial demand for the stock from the many index funds and exchange-traded funds (ETFs) that track the S&P 500. These funds are now required to purchase shares of The Trade Desk to mirror the index's new composition. Inclusion in the S&P 500 is often seen as a mark of a company's maturity and importance within the market landscape. For The Trade Desk, it provides greater visibility and potentially increased liquidity for its shares. The move places the company, a key player in the Communication Services sector, among the largest and most influential public companies in the United States.
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What Is The Market Telling Us
The Trade Desk’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The Trade Desk is down 30.2% since the beginning of the year, and at $82.16 per share, it is trading 41.1% below its 52-week high of $139.51 from December 2024. Investors who bought $1,000 worth of The Trade Desk’s shares 5 years ago would now be looking at an investment worth $1,883.
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