What Happened?
Shares of digital advertising platform The Trade Desk (NASDAQ: TTD) jumped 5.7% in the afternoon session after Guggenheim's John DiFucci upgraded both Salesforce and ServiceNow to Buy, arguing the AI-disruption fear that gutted the sector during the year had pushed valuations too low.
This was a valuation call from a skeptic, not an AI endorsement. DiFucci wrote he is "not upgrading because we see [ServiceNow] as an AI beneficiary," calling near-term AI monetization "unlikely to materialize" and AI risks "very real," while arguing the darkest scenario was already priced in (CRM at ~3.7x EV/recurring revenue; NOW's $125 target at 7.5x EV/NTM recurring revenue). The read-through was what lifted the group.
When a previously cautious, highly ranked analyst flips to Buy on the two enterprise-SaaS bellwethers purely on valuation, it signals the "SaaSpocalypse" repricing overshot, de-risking the whole complex and inviting bargain-hunting across peers. Oracle's ~2% bounce added an independent second leg, driven by inclusion on William Blair's July Analyst Conviction List, a new AI product, and oversold conditions after the previous disclosure of a $40 billion AI-infrastructure raise. Together they extended a multi-week recovery.
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What Is The Market Telling Us
The Trade Desk’s shares are very volatile and have had 29 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 previous big move we wrote about was 29 days ago when the stock dropped 8.3% as investors took profits following a significant rally the previous day.
Software stocks pulled back after one of the sharpest sector recoveries on record. The iShares Expanded Tech-Software ETF gained 15% across the prior three sessions — its best such run ever — while ServiceNow completed a nearly 40% rally in just four sessions from its April lows. With gains of that magnitude in that timeframe, profit-taking is the natural response. The S&P 500 software and services sector fell approximately 3.78% on the day. Critically, the broader market provided no significant selling pressure as the S&P 500 was essentially flat, the Nasdaq barely changed, and the Dow edged marginally higher.
This was sector-level digestion, not a broad risk-off move. Salesforce surrendered nearly half of the previous day's 10%-plus surge as worries about Anthropic's upcoming IPO and Google's $80 billion equity raise added pressure to the rerating. CrowdStrike slipped as pre-earnings caution set in ahead of the June 3 print — the stock rose approximately 70% year-to-date as options markets priced in a 9.5% swing on the result. The sector's underlying thesis remained intact: the SaaSpocalypse narrative broke, and many names continued to trade well below their 52-week highs. The pullback was the market catching its breath before the next round of data, not reversing course.
The Trade Desk is down 49.2% since the beginning of the year, and at $19.15 per share, it is trading 78.7% below its 52-week high of $89.76 from August 2025. Investors who bought $1,000 worth of The Trade Desk’s shares 5 years ago would now be looking at only $249.79.
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