Citi analysts raised The Trade Desk (NASDAQ:TTD) price target to $86.00 from $78.00 and maintained their Buy rating. The analysts believe that Trade Desk's recent Kokai launch showcases a product that will strengthen the platform. With its leading DSP scale, especially in CTV, Trade Desk has a notable advantage, and its exceptional product is expected to widen the gap between itself and competitors as it incorporates more Artificial Intelligence capabilities.

These AI capabilities are anticipated to be utilized more efficiently across different components of the platform, leading to the development of new products centered around AI, data, measurement, inventory optimization, and partner integrations. This expansion is expected to extend the use case for Trade Desk beyond larger-scale agencies and advertisers to smaller ones, and eventually, SMBs.

This shift is crucial since Trade Desk currently heavily relies on the largest ad agencies and advertisers, while smaller advertisers play a significant role in digital advertising, particularly on the closed web. Although TTD multiples are considered expensive, Citi sees a long-term runway for growth driven by product differentiation and a growing moat.