Why Cathie Wood Is Bullish On The Trade Desk Despite Past Week's Slump

Cathie Wood-led Ark Investment Management is betting ad-tech company Trade Desk Inc TTD will benefit from the shift in advertising from linear television to streaming.

What Happened: The California-based company’s shares are down 21.8% since the company reported a first-quarter earnings beat a week ago.

The slump came as the company, which specializes in helping companies buy online ads, didn't provide earnings guidance for the next quarter due to uncertainty over Apple Inc’s AAPL new opt-in advertising rules. It also announced a ten-for-one stock split with shares to start trading on a split-adjusted basis on June 17.

Apple recently started rolling out a rule that it introduced last year, requiring app developers to use a pop-up notification asking permission to gather data that can be used to track users across third-party sites and apps.

See Also: Apple Prepares To Expand Ad Business Amid Allegations Of Stifling Rivals: Report

The New York-based investment firm Ark, which has been buying shares in The Trade Desk, a rival to Alphabet Inc-owned GOOGL Google, is however optimistic despite the stock’s recent battering. 

“The Trade Desk is an ad-tech company that facilitates audience targeting across different media formats and should continue to benefit from the shift in advertising from linear TV to streaming," the Cathie Wood-led firm said in a note.

The Ark Next Generation Internet ETF ARKW holds 215,413 shares in TTD, worth about $106.3 million.

The Trade Desk is the seventeenth-largest holding of ARKW. No other Ark ETF holds shares of the ad-tech firm

Price Action: TTD shares closed 4.86% higher at $517.49 on Friday. Shares have fallen 35.5% on a YTD basis.