Adtech Stocks Tumble: AI & Big Tech Competition Hit Revenue
The second quarter of 2025 has proved to be a turbulent period for the adtech sector, leaving investors sharply divided and prompting a sell-off in key players such as The Trade Desk, PubMatic, and Viant. Unlike the broader market, as reflected by the NASDAQ Composite, adtech stocks have generally trended downwards, with only a handful of firms like AppLovin and Criteo managing to weather the storm.
Industry experts contend that these latest figures underscore the profound challenges facing adtech companies, foremost among them the increasing encroachment of Big Tech titans into their traditional domain. Jason Kint, CEO of Digital Content Next, articulated this shift, stating that the sector now operates “in a market dominated by Google, Meta, and Amazon—three vertically integrated giants that collectively control the lion’s share of digital ad spend.” He further elaborated that these behemoths not only run the largest ad networks but also own the underlying platforms, data, and exchanges, allowing them to extract value from every part of the digital supply chain, often at the expense of publishers, advertisers, and the adtech companies themselves. Compounding this pressure is the pervasive influence of the artificial intelligence boom, which is fundamentally altering how consumers search for information and, in turn, stifling traffic to publishers, placing adtech firms in an unprecedented crucible of change.
The Trade Desk, a prominent demand-side platform, had enjoyed considerable favor on Wall Street throughout 2024 and early 2025, marked by soaring share prices and an impressive 26% year-over-year revenue growth in the first quarter. However, its fortunes swiftly reversed. The company’s stock plummeted nearly 40% late last week following a Q2 earnings report that revealed a significant deceleration in revenue growth and intensified competition, particularly from Amazon. Despite this, CEO Jeff Green controversially asserted during an investor call that “Amazon is not a competitor,” a claim financial analysts seem to contradict with expectations of a declining growth rate for The Trade Desk throughout the second half of the year.
PubMatic, a leading sell-side platform, also reported a challenging quarter, attributing revenue hiccups in July to changes made by a major demand-side partner. Its stock has fallen approximately 20% since earnings were reported and over 30% in the last two weeks. CEO Rajeev Goel explained that “a top DSP buyer shifted a significant number of clients to a new platform that evaluates inventory differently, impacting our revenue,” adding that PubMatic plans to “diversify ad spend away from legacy DSPs.” Meanwhile, MNTN, a high-profile connected TV (CTV) adtech firm that gained prominence with celebrity backing, saw its shares tumble after reporting its first-ever earnings following a May initial public offering.
Amidst this widespread downturn, a select few companies have distinguished themselves. AppLovin, which specializes in helping developers monetize mobile apps through advertising, stands out. In June, the company strategically divested its mobile apps business, a move that bolstered investor confidence and generated $400 million in cash. This strategic shift contributed to a remarkable 77% year-over-year jump in Q2 revenue, reaching $1.26 billion, and propelled its stock to double-digit growth last week. AppLovin had already surpassed The Trade Desk last year to become the largest adtech company by market capitalization. Similarly, Zeta Global, which positions itself as an AI-powered marketing cloud platform, has experienced increased investor interest over the past fortnight. Criteo, a commerce-focused demand-side platform, has also managed to maintain its standing despite growing competitive threats.
The ad verification sector, a crucial component of digital advertising, saw mixed results. Integral Ad Science (IAS) experienced a stock surge after its August 7 earnings report, which highlighted better-than-expected publisher performance and an adjusted EBITDA of $109.84 million. In contrast, DoubleVerify, while exceeding revenue estimates, fell short on earnings per share.
As the adtech sector enters the latter half of 2025, it faces a landscape marked by sharply divided investor sentiment, amplified by anxieties surrounding the rapid advancements in AI and broader macroeconomic uncertainties, including the impact of government tariffs and persistent inflation. While some analysts maintain a degree of confidence in the industry’s overall health, they view the current sell-off as a clear indicator of increasing fragmentation and competition. Brian Wieser, principal and CEO of Madison and Wall, offered a nuanced perspective: “Adtech companies are in a surprisingly solid place, by which I mean most businesses are running well enough with low double-digit growth on average, and mostly with growing profitability.” He concluded that the primary challenge lies in the absence of a consolidator, suggesting the business is likely to remain a “fragmented, almost cottage industry, with a large number of mid-sized companies but few giants.”