They are addressing a global money supply of roughly $60 trillion. That’s not a niche market—it’s a massive runway for growth. In this piece, I break down five key insights that shape my view on USDC and the broader stablecoin market.

Quick take

• Stablecoins are evolving from a crypto tool into a global settlement layer.

• USDC is building an institutional moat.

• With a ~$60T addressable market, this is a long-term compounding opportunity, not a short-term trade.

1. Stablecoins matter

First off, what is a stablecoin?

A stablecoin is a dollar converted into a digital token. The token can be exchanged for a real dollar at any time. The deposited dollars are typically invested in U.S. Treasuries by the stablecoin issuer, which earns revenue from those reserves. This is the primary revenue stream of Circle Internet Group, the company behind USDC.

The token itself is issued on a blockchain. USDC operates across several blockchains, with Ethereum and Solana being the largest. What’s important to understand is that Circle does not control these blockchains. The blockchain is a decentralized record-keeping system.

Why do we need them?

The key reason stablecoins provide value comes down to how money moves today.

Moving money still relies on multiple intermediaries, typically banks and custodians. In international wire transfers, one bank sends a message to another indicating that funds are on their way. One account is credited, another debited.

Often, several banks are involved because the sending bank may not have a direct relationship with the receiving bank.

You are effectively dealing with separate databases that do not communicate directly with one another. The longer the distance, the more intermediaries and reconciliation steps are required.

These layers create delays, which can be costly. In global trade, for instance, if funds were received instantly, goods could be released sooner.

Such delays also help explain why companies often rely on short-term financing; their funds are temporarily locked within the banking system.

Stablecoins reduce these frictions by operating on a single system: the blockchain. This acts as a global settlement layer, where both sides of a transaction exist on the same database rather than separate ones.

In financial markets, operating on a shared system also creates advantages. When you buy a bond or stock, the “asset database” and the “cash database” are typically owned by different companies. This creates uncertainty, as it takes time to verify whether the other party can fulfill its obligations.

Clearing houses exist largely to solve this problem. If one party cannot meet its obligations, the clearing house guarantees either payment or delivery of the asset.

With stablecoins, however, settlement can happen instantly while both parties operate on a shared database. This reduces reliance on clearing houses and could potentially save billions in clearing costs over time.

This is why institutions like BlackRock argue that financial markets should gradually move toward shared blockchain infrastructure.

Stablecoins are important because they operate on a global settlement layer and reduce reliance on intermediaries in payments and financial markets.

The key takeaway is that stablecoins don’t just improve payments—they reduce the need for fragmented financial infrastructure altogether.

2. Stablecoins are network-effect businesses

Why does Tether, an unregulated stablecoin company based in El Salvador, hold a 69% share of the stablecoin market? Its advantage comes from significant global liquidity.

Almost every cryptocurrency on major exchanges is traded against USDT, Tether’s stablecoin. To add another stablecoin trading pair such as USDC, an exchange would need to migrate thousands of trading pairs and attract new liquidity. That is a major hurdle.

Traders benefit from choosing USDT as well. If somebody wants to swap $100 million worth of Bitcoin for USDT, they can typically do so with minimal slippage or price impact. Doing the same with another stablecoin on many exchanges would likely create greater slippage. These are real costs and a strong reason to continue using USDT over a newer competitor.

This creates a feedback loop that is extremely difficult to disrupt. Liquidity attracts market makers and trading pairs, which attract additional users, which in turn attract even more liquidity.

This is why USDC has struggled to materially take market share from Tether within the crypto ecosystem. USDC’s share is increasing, but gradually.

Q4 earnings release; USDC and USDT control 97% of the market.

USDC and USDT dominate 97% of the stablecoin market for a clear reason: money behaves like a network business. The more people use it, the more valuable and attractive it becomes to others.

3. Signs that USDC is decoupling from crypto

USDC’s primary growth driver is the amount of USDC in circulation, also known as circulating supply. As more individuals and institutions use and hold USDC, circulating supply increases.

For Circle Internet Group, the company behind USDC, a larger circulating supply directly increases revenue. Circle invests the reserves backing each USDC token into U.S. Treasuries, so as the market capitalization of USDC rises, earnings rise as well.

Expanding the number of use cases for USDC helps increase circulating supply, which directly benefits Circle’s business model.

Historically, demand for USDC was closely tied to cryptocurrency trading activity. People frequently used stablecoins to move quickly between crypto assets and dollars. During the 2022 bear market, this relationship became very clear.

Following the collapse of Terra Luna and the failure of FTX, Bitcoin declined sharply, and USDC supply followed. Market capitalization fell from roughly $60 billion to below $20 billion as capital exited crypto and moved back into fiat currencies.

What is different now is the latest drawdown. Despite an approximate 50% decline in Bitcoin since October 6, 2025, USDC’s market capitalization continued rising. This suggests that USDC is increasingly being used for purposes beyond crypto trading alone.

USDC market cap keeps rising during crypto market downturn.

Furthermore, USDC on-chain volume saw sharp sequential increases between Q2 and Q4 of 2025. Q4 marked the beginning of the crypto bear market, yet USDC volume growth continued.

This provides additional evidence that the sources of USDC activity are becoming more diversified beyond crypto.

USDC on-chain volume keeps rising despite crypto bear market in Q4 2025.

In conclusion, USDC increasingly appears to be used for broader financial activity beyond cryptocurrency speculation. As a result, Circle’s revenue may become less dependent on crypto market volatility, potentially making the business more resilient and deserving of a higher valuation multiple.

4. USDC is in an institutional flywheel

The implementation of the GENIUS Act in the U.S. has been an important catalyst for stablecoins. By creating a federal framework for issuers such as Circle, it effectively de-risked USDC for more conservative institutions.

Here are several recent developments involving Circle and institutional adoption:

• Deutsche Bank and Standard Chartered are developing infrastructure that facilitates stablecoin-based settlement for cross-border payments. They also serve as custody and on/off-ramping partners for USDC.

• In December 2025, Visa adopted USDC for settling payments outside conventional banking hours. According to Visa, growth has been strong, reaching roughly $4.5 billion in annualized volume.

• Companies including Cash App, Mastercard, Gusto, and Interactive Brokers have introduced products leveraging USDC.

• USDC has become the primary collateral and settlement asset for Polymarket, currently the world’s largest prediction market.

• JPMorgan executed an end-to-end transaction involving a $100 million tokenized bond where the proceeds were settled in USDC.

• Circle Payments Network, a Visa/Mastercard-like network enabling payments between financial institutions, is scaling rapidly. The network launched in June 2025 and now processes roughly $5.7 billion in annualized volume. Currently, 55 institutions are enrolled, while another 74 are undergoing eligibility review.

As institutional adoption expands, network effects become increasingly important. When one institution adopts USDC, connected counterparties, service providers, and platforms often begin integrating it as well.

This makes adoption easier for future participants and strengthens the ecosystem over time. More integrations lead to greater usage, while greater usage attracts additional integrations.

5. A market built to compound

The global money supply is estimated at roughly $120 trillion, of which around $60 trillion sits in physical cash and demand deposits—essentially payment money and working capital.

The true opportunity is not the entire money supply, but this ~$60 trillion pool. It is capital already designed to move through the global economy, making it the most immediate addressable market for stablecoins like USDC.

Against that backdrop, USDC’s roughly $75 billion market capitalization represents only a tiny drop. Even a relatively small shift in allocation could materially increase circulating supply—and with it, Circle’s revenue.

Growth will likely come from areas where speed, cost, and accessibility matter most, such as international transfers and financial settlement.

AI could also accelerate stablecoin adoption. AI agents are capable of transacting instantly—paying for data, content, or services—and enabling microtransactions that were previously uneconomical due to high fees.

If payments evolve in this direction, stablecoins could capture a larger share of global transactions and, by extension, global payment money. That would create structural demand beyond traditional crypto-related use cases.

Takeaway

The core of the thesis is relatively simple: stablecoins allow money to move across a single, shared system rather than through fragmented banking infrastructure. That can reduce friction, lower settlement costs, and increase transaction speed across payments and financial markets.

This is why institutions are increasingly adopting stablecoins and integrating them into their systems. USDC appears particularly well positioned because of its regulatory framework and growing institutional adoption.

What makes the opportunity interesting from an investment perspective is the size of the market. Stablecoins are targeting a global pool of roughly $60 trillion in payment money and working capital. Even small shifts in adoption could materially expand USDC’s circulating supply and, by extension, Circle’s earnings power.

For that reason alone, I believe this is a space worth watching closely.

Disclaimer

This article reflects my personal views and is for informational purposes only. It is not financial advice, and nothing here should be considered a recommendation to buy or sell any securities. Please conduct your own research and consider your own financial situation before making any investment decisions.

• Siemens Energy is not in a normal cycle: the global electricity buildout is a multi-decade trend

• Gas and grid infrastructure are essential for data centers and renewable energy stability

• Strong growth outlook: EPS is expected to increase roughly 4× by 2028, while margins continue to expand

• Risk remains at Siemens Gamesa, but the company’s core cash-generating businesses are strong

• Valuation remains cheaper than peers, creating an attractive risk-reward setup

The opportunity

Siemens Energy is an industrial company that sells gas turbines and electricity grid infrastructure. At first glance, it appears to be a traditional cyclical industrial business. I believe that view is outdated.

We are not in a normal cycle. We are in a multi-decade electricity infrastructure buildout.

Gas is playing a vital role in meeting rising electricity demand, particularly for data centers. While the market focuses heavily on nuclear energy as the long-term solution, the short- to medium-term supply of reliable power is largely coming from natural gas. Gas turbines can ramp quickly and provide the stability needed in renewable-heavy power systems.

The company is guiding for mid- to high-teens revenue growth and meaningful margin expansion through 2028. Earnings per share are expected to increase roughly fourfold by fiscal 2028, creating significant operating leverage.

The wind division, Siemens Gamesa, remains a risk, and the turnaround is not yet fully complete. However, even with that overhang, Siemens Energy is trading at a discount to its direct peers, GE Vernova and Mitsubishi Heavy Industries.

The valuation is not demanding, and if earnings develop as guided, profit growth alone can deliver an above-benchmark return.

Subscribe now

Business model overview

Below I’ve summarized the main business segments in which Siemens Energy operates.

Siemens energy business segments per end of fiscal 2025

Gas Services: The Cash Engine

Gas Services primarily sells gas turbines and steam turbines. A gas turbine is a type of engine that generates electricity by burning fuel—usually natural gas—and using the hot gases produced to spin a turbine, which then drives a generator. These turbines are widely used in power plants because of their efficiency and ability to respond quickly to changes in electricity demand.

The company also offers aeroderivative gas turbines, which are essentially gas turbines resembling jet engines. These units are often installed next to data centers to provide immediate on-site power. They function similarly to diesel generators but offer greater efficiency.

A steam turbine converts steam into mechanical energy, which then drives a generator to produce electricity. Steam turbines are commonly used in nuclear power plants.

Three companies effectively control the global heavy-duty gas turbine market:

• Mitsubishi Heavy Industries

• GE Vernova

• Siemens Energy

Barriers to entry are extremely high due to the technological complexity of these machines and the decades of R&D embedded within them.

A new entrant would need to invest billions of dollars to develop a top-quality turbine. Customers also need confidence that a manufacturer can provide reliable long-term service and maintenance for one of the most complex machines in the industrial world.

Gas Services is particularly attractive because, in fiscal 2025, 64% of revenue came from maintenance and service contracts. The business model resembles that of aerospace engines: hardware is often sold at lower margins, while long-term service contracts generate the majority of profits.

In fiscal year 2025, Gas Services generated roughly 70% of Siemens Energy’s total pre-tax free cash flow, while accounting for only 31% of total revenue.

Gas Services is the company’s cash flow machine.

Grid Technologies: The Second Growth Engine

While gas turbines generate electricity, the Grid Technologies division ensures that electricity is transported safely and efficiently across the grid.

This division sells products and solutions that move electricity from generation sites to end users. Core products include:

• Transformers

• Circuit breakers

• Switchgear

• Grid stabilization equipment

Grid Technologies (GT) is Siemens Energy’s second-largest division, representing approximately 29% of group revenue.

Service accounts for just 6% of revenue, making this business more dependent on new equipment sales. As a result, operations are somewhat more cyclical. If new orders slow down, the company cannot rely heavily on recurring service revenue as a buffer.

Demand remains extremely strong. At the end of fiscal year 2025, the division reported a backlog of €42 billion, approximately four times annual revenue. This reflects structural demand rather than a temporary uptick.

As shown in the graph below, GT delivered the highest revenue growth rate of all business units in fiscal 2025, growing 25%.

Siemens energy 2025 revenue and profit metrics

What Drives Growth?

For Gas Services, the following three developments drive growth for its products.

Highly dispatchable power

Gas turbines have become highly sought after because gas-fired power generation is easy to control. Since a gas turbine can start up within roughly 10–20 minutes, it serves as an excellent backup when solar or wind generation falls short due to a lack of sunlight or wind.

Contrast that with roughly a 6-hour startup time for a coal plant and potentially multiple days for a nuclear facility.

Coal-to-gas conversion

Coal-to-gas conversion is another major growth driver. Combined-cycle gas plants are among the most efficient large-scale sources of electricity generation, while also emitting less CO2 than coal-fired facilities.

As a result, many coal-fired plants are transitioning toward gas-fired generation, increasing demand for new turbines.

Data centers

Data centers represent a major source of incremental electricity demand. According to Goldman Sachs, 63% of the additional electricity required for new data centers through 2030 is expected to come from gas-fired power generation.

Goldman Sachs expects 51% of datacenter expansions to be powered by natural gas

Growth within the GT business can largely be divided into four categories.

Growth in electricity demand

Electricity demand is rising rapidly, requiring grids to expand and modernize in order to manage higher loads. If current forecasts prove accurate, electricity consumption could grow by roughly 5.7% annually over the next five years.

That would represent one of the highest electricity demand growth periods in modern history.

Forecast of annual U.S. electricity demand growth

Aging grid infrastructure

Approximately 80 million kilometers of grid infrastructure will need renewal or expansion by 2040, roughly equal to the size of today’s entire installed grid base.

Two-way power flows

Power grids are no longer one-directional systems. Modern grids must handle decentralized generation from solar, wind, batteries, and distributed energy systems.

This requires new transformers, switchgear, and grid stabilization equipment—all products that GT supplies.

Interconnectors

Because renewable energy storage remains relatively inefficient at scale, excess electricity generated by solar or wind in one region often needs to be transported to another.

This is especially relevant in Europe, where countries increasingly rely on cross-border electricity flows. As a result, large HVDC (High Voltage Direct Current) transmission lines are being constructed, driving additional demand for switchgear, circuit breakers, and other grid infrastructure equipment sold by GT.

Both Gas Services and Grid Technologies are benefiting from long-term structural trends that appear significantly stronger than previous industrial cycles. This could allow both divisions to sustain elevated growth rates for many years.

Subscribe now

Valuation vs. Peers

At first glance, Siemens Energy appears expensive. The next-twelve-months (NTM) P/E ratio currently stands at 37x. However, its direct competitors in the gas turbine market—GE Vernova and Mitsubishi Heavy Industries—trade at roughly 57x and 45x earnings, respectively.

I prefer looking at the PEG ratio (PE divided by growth) as well , since companies with strong earnings growth can justify higher valuation multiples.

Below, I calculated the NTM P/E ratio divided by the consensus five-year EPS growth rate. I believe this provides a better view of long-term earnings power without relying on forecasts that extend too far into the future.

On a forward PEG basis, Siemens Energy seems undervalued relative to peers. Source: Koyfin

The consensus currently expects EPS to reach roughly €7 by 2028.

If Siemens Energy maintains a next-twelve-months P/E ratio of 37x—still below most major peers—the implied share price by the end of 2027 would be approximately €288, representing a 47% compound annual growth rate (CAGR).

If Siemens Energy were to trade at the average peer NTM P/E multiple of 43x, the stock could potentially reach €301 by the end of 2027, implying roughly a 50% CAGR.

This could represent an attractive opportunity to generate alpha within a portfolio.

Risks

Siemens Gamesa

The primary operational risk remains Siemens Gamesa. In fiscal 2025, Gamesa generated negative free cash flow of approximately €3 billion.

Management’s recovery plan targets break-even by 2026 and operating margins of 3–5% by 2028.

If the turnaround fails—and Gamesa were still generating negative 5% margins by the end of 2027—EPS could decline by roughly €1 per share. Under that scenario, the implied share price would fall to approximately €222 instead of €288.

Even in that downside case, Gas Services and Grid Technologies could still deliver meaningful returns.

Execution risk is another key concern. As companies such as Rolls-Royce and General Electric have experienced, design flaws, engineering setbacks, or large investments made too late in a product cycle can lead to cost overruns, project delays, and lower profitability.

Lower data center investment

If data center infrastructure investments were to slow materially, demand for gas turbines and grid technologies could weaken.

However, electricity demand growth is much broader than AI alone. Electric vehicles, heat pumps, and the broader electrification of society provide a strong structural underpinning for long-term electricity demand.

Fixed-price contract risk

Siemens Energy also faces risk from older fixed-price contracts within its €146 billion backlog.

While newer contracts increasingly include indexation clauses that pass through inflation, remaining non-indexed projects—particularly within Grid Technologies and Offshore Wind—could pressure margins if commodity and energy prices rise sharply.

Conclusion

Siemens Energy is very well positioned for the explosive growth in global electricity consumption.

This is not a normal industrial cycle. It may become one of the strongest electricity infrastructure buildout periods since the 1950s and 1960s, when electrical appliances became widely adopted.

Historically, Siemens Energy would have been viewed as a cyclical company that experiences several years of growth followed by deceleration. Given the underlying structural drivers, I believe this opportunity is substantially larger.

Despite the inherent risks associated with industrial businesses, I believe the company’s long-term growth potential creates an attractive risk-reward opportunity.

The recent share price weakness related to the Iran conflict could provide an appealing entry point for long-term investors.

The Trade Desk (TTD) is a company I hold in my portfolio, and its share price has been obliterated recently. The NTM (next twelve months) P/E ratio currently sits at 19.4, the cheapest NTM P/E multiple at which this stock has ever traded.

Is TTD in a Netflix-style freefall, similar to when Netflix collapsed after reporting a slowdown in subscriber growth in April 2022? The market clearly interpreted that slowdown as structural, sending Netflix shares down roughly 30% in a single day.

Are TTD’s problems structural, or is the market panicking?

I am personally trying to determine whether to add to, hold, or sell this stock in my own portfolio.

For readers unfamiliar with TTD: the company provides a platform that enables buyers—primarily advertising agencies—to purchase ads across the “open internet.”

A brand can set a budget and advertise across multiple channels, such as connected TV (CTV), audio (podcasts), display ads, in-app placements, or retail media (e.g., Walmart Connect or Kroger Precision Marketing).

The goal of the platform is to allocate a client’s advertising budget as efficiently as possible, directing spending toward the areas where it is most effective.

What happened to growth?

The core issue is that quarterly revenue growth has slowed, bottoming at 17.74% in the third quarter of 2025.

Over the past five years, the company’s median quarterly growth rate has been around 25%, meaning TTD is now growing materially slower than it has historically.

This slowdown is the primary reason the stock has tanked: the market believes growth has structurally decelerated.

The Trade desk quarterly revenue growth rate (yoy)

Let’s take a closer look.

TTD relies on advertiser spending; the business is cyclical and therefore susceptible to shocks in advertising budgets.

This is what Jeff Green said during the Q2 2025 earnings call:

“As I mentioned before, Q4 was relatively stable, though signs of volatility were building beneath the surface ahead of a contentious election cycle. That pressure intensified in Q1 with growing concern among clients.”

He then addressed the Q2 quarter:

“From a macro standpoint, some of the world’s largest brands are absolutely facing pressure and a degree of uncertainty. Some have to respond more than others to tariffs. Many are managing inflation worries and the related pricing that comes with that.”

In Q3, he echoed similar conclusions. His view is that the lower growth rate is largely attributable to a more uncertain macroeconomic backdrop, driven by tariffs and broader macro volatility.

That explanation is plausible, as advertising spending can be highly volatile. In Q2 2020, TTD’s quarterly growth rate dropped sharply to -12.86% due to the pandemic shock.

The beginning of 2025 also represented a meaningful shock, given the tariff environment and fears of a potential recession or economic slowdown. It is therefore plausible that advertisers reduced spending.

Furthermore, TTD has noted that, excluding political spending, quarterly growth would have been approximately 22%.

This adjustment matters because growth in Q3 2024 was exceptionally high (27.3%) due to political advertising. Excluding that effect, Q3 year-over-year revenue growth would have been closer to 22%.

In that scenario, investors likely would not be panicking.

Is programmatic still taking share of overall advertising?

As mentioned, TTD is essentially a platform where brands buy advertisements across the open internet. The company’s largest segment—roughly 50% of the business—is connected TV (CTV) advertising.

If you look at the chart below, U.S. CTV ad spend still represents only 32% of total TV advertising spend. That suggests the market is far from mature.

Projections indicate that CTV ad spending could roughly double by 2029 compared to 2024 levels.

Linear TV as a share of total ad spending is declining

While CTV ad spend still accounts for only 32% of total TV advertising spend, CTV viewership already represents roughly 40–60% of total viewership.

The conclusion is straightforward: a significant portion of advertising budgets still needs to migrate toward CTV.

Given the remaining growth runway for CTV, there is every reason to believe that TTD can continue growing its CTV business based on the size of the total addressable market (TAM) opportunity.

At this stage, the data does not point to structurally stalling revenue growth for TTD.

Growth acceleration

In fact, one could argue that growth may accelerate again in 2026.

If you read the Q2 earnings call carefully, Jeff Green states:

“We are signing more multiyear JBPs, or joint business plans, than ever before with leading agencies and brands. In fact, the number of live JBPs is at an all-time high, and we continue to see spend under JBPs significantly outpace the rest of our business. What’s even more encouraging is the strength of our JBP pipeline, with nearly 100 JBPs in progress, many of them in the late stages of development.”

He also said:

“We see clearly what is on the horizon for our space, and we’re convinced we’re the best-positioned company in adtech to accelerate our growth in 2026.”

Explicitly talking about accelerating growth is not something management teams typically do unless they have a relatively high degree of confidence in the underlying business.

Audio

I believe another major growth avenue in the coming years is audio—not traditional radio, but digital audio platforms such as Spotify, Pandora, iHeart, TuneIn, SoundCloud, SiriusXM, and others. TTD has integrations with all of them.

This market is rapidly shifting toward programmatic advertising. As recently as April 2025, Spotify introduced its Spotify Ad Exchange, enabling advertisers to bid programmatically on Spotify’s audio inventory.

Demand for podcast advertising in particular appears enormous. Jeff Green stated during the Q3 earnings call:

“Audio has become one of the fastest-growing channels as consumers spend an average of three hours a day listening to their favorite music and podcasts. Over time, I expect CTV and audio will grow as a percentage of mix, fueled by the premium authenticated nature of these channels.”

According to Digiday, programmatic buys on Spotify alone grew 58% year over year.

Currently, most podcast ads are pre-recorded and therefore not tailored to the individual listener. Programmatic audio advertising enables ads to be served dynamically to specific listeners, significantly increasing the value proposition for advertisers compared to traditional pre-recorded ads.

Considering how much time people spend listening to audio—while driving, exercising, or taking a walk—I agree with Green that audio could eventually become the second-largest channel after CTV.

According to eMarketer, programmatic audio spending is expected to reach $2.6 billion in 2026, representing a 17% CAGR since 2022.

Programmatic audio spending is growing mid to high teens

In my opinion, audio has a big future, considering the engagement audio has during the day. One research in Australia for example finds that digital audio has a higher engagement then CTV:

Audio beats CTV in engagement in Australia

While audio currently represents only about 5% of TTD’s business, the key takeaway is that audio is likely to become a meaningful growth driver—much like CTV has been in recent years—further cementing TTD’s long-term growth runway.

Amazon

A concern I often see among analysts and fellow writers is the perceived threat from Amazon’s own DSP (demand-side platform) and, to a lesser extent, Google’s DSP.

Amazon operates its own DSP, allowing advertisers to buy ads directly through its platform. The issue is that Amazon and Google face a conflict of interest: they own both the buying platform and the inventory.

As a result, they have an incentive to direct ad spend toward their own properties. For Amazon, this includes Amazon Prime, Fire TV, and Amazon.com.

TTD, by contrast, does not own inventory and instead routes ad spend toward the placements that deliver the highest value for advertisers.

Generally speaking, the ad auction process is also less transparent within Amazon DSP compared to TTD. Since advertisers tend to favor transparent bidding processes, this creates a structural disadvantage for Amazon DSP.

One area where TTD’s neutrality clearly stands out is reporting. TTD provides log-level data for ad campaigns, offering detailed insight into when an ad was served, on which website or app, at what price, and to which ID.

Amazon, on the other hand, primarily provides aggregated reports. While some granularity exists, it is largely restricted to the Amazon ecosystem.

In short, Amazon tells you how your ads performed; The Trade Desk allows you to verify it yourself.

Another important distinction is that TTD shows how your bid compares to the clearing price—the price actually paid for an impression. This allows advertisers to assess whether they are overpaying or underpaying, which is valuable input for future bidding decisions.

Amazon typically reports average CPMs, but not impression-level pricing. As a result, advertisers using Amazon DSP cannot know with certainty whether an ad placement on an Amazon property represented better value than an alternative on the open internet.

Where Amazon Does Compete

Amazon is strongest when the shopper journey takes place within the Amazon ecosystem. If a user browses on Amazon, searches for a product, or adds something to their cart, that data becomes extremely valuable to advertisers.

If that same user later watches content on Prime Video and eventually purchases something on Amazon.com, advertisers can clearly see that the ad worked. That level of attribution is gold for marketers.

However, when a user does not have a meaningful “Amazon footprint,” the value proposition of Amazon DSP becomes less compelling.

I therefore believe advertisers will continue using both platforms alongside each other: Amazon DSP for high-quality purchase data within the Amazon ecosystem, and The Trade Desk for reaching users across the broader open internet.

While Amazon is actively expanding its access to the open internet, TTD still offers significantly greater breadth. The platform connects to tens of thousands of publishers, something Amazon currently cannot match.

For example, TTD has partnerships with major U.S. retail media networks such as Kroger, Walmart, Target, and Instacart, as well as international retailers like Tesco in Europe.

Through TTD, advertisers can run campaigns across multiple retail networks without having to integrate with each marketplace individually.

Naturally, advertisers cannot access Walmart Connect through Amazon DSP—another consequence of Amazon’s inherent conflict of interest.

Why TTD’s Breadth Matters

TTD’s broad reach compared to Amazon delivers several important advantages:

• Omnichannel synergy

Campaigns that run across multiple channels tend to be more effective than those limited to only a narrow set of channels.

By combining CTV, audio, display, mobile, and other formats, advertisers increase the probability of reaching users throughout the day across different touchpoints.

• Better price discovery

TTD participates in millions of ad impressions per second, allowing it to identify lower-cost and higher-value advertising opportunities.

In practice, this means routing advertising budgets toward the placements that offer the best return for advertisers.

• First-price auction optimization

In recent years, the ad tech industry has largely shifted toward first-price auctions.

In a first-price auction, bidder A bids $10, bidder B bids $8, and bidder A pays the full $10. This differs from second-price auctions, where bidder A would have paid only slightly above the second bid, for example $8.01.

In a first-price environment, accurately estimating the optimal bid becomes critical.

TTD’s access to broad open-internet data allows its AI models to predict clearing prices more effectively because the company has broader access to the “liquidity” of the ad market.

Amazon, with more limited access to the open internet, does not see the full “order book,” to continue using stock market terminology.

In short, TTD benefits from two major structural advantages: neutrality and breadth.

Competitive Perspective

It is also worth noting that Amazon DSP and Google’s DV360 have been around for a long time.

DV360 has effectively existed for roughly 14–15 years, while the DV360 brand itself has been in place for around seven years. Amazon DSP has been around for approximately 12–13 years, with the Amazon DSP brand existing for roughly six to seven years.

During this entire period, TTD has continued to deliver exceptional growth.

My view is that Amazon is absolutely a competitive threat, and its efforts to expand access to third-party publishers bring it closer to TTD’s territory.

However, in practice, it is not a full substitute.

As an advertiser, you want breadth and liquidity in order to route advertising budgets as efficiently as possible—and that remains TTD’s core strength.

Valuation and Conclusion

I believe the recent slowdown in growth appears far more likely to be the result of a temporary shock—driven by tariffs, macro uncertainty, and advertiser caution—than a structural deterioration in the business.

Advertising spend has always been cyclical, and nothing currently suggests that The Trade Desk’s long-term opportunity has materially weakened.

The addressable market remains enormous. CTV advertising is still significantly underpenetrated relative to viewership, programmatic advertising continues to gain share, and audio is emerging as an additional growth runway.

On top of that, management has indicated that Joint Business Plans (JBPs) are at all-time highs. It is difficult to reconcile that level of long-term advertiser commitment with the idea that TTD’s growth story is broken.

Concerns around competition from Amazon DSP and Google DV360 also appear somewhat overstated.

Both platforms have existed for many years, during which The Trade Desk continued to deliver exceptional growth. Their products are also fundamentally different.

Amazon DSP is extremely powerful for advertisers targeting users within the Amazon ecosystem, but Amazon does not own the broader retail landscape.

If I were an advertiser, I would absolutely use Amazon DSP to target Amazon shoppers—but I would still need The Trade Desk to reach the open internet at scale.

From a valuation perspective, expectations already appear relatively pessimistic.

Analysts are projecting a non-GAAP EPS CAGR of roughly 16% for 2025–2028, materially lower than the 22% CAGR achieved between 2021 and 2024. In other words, the market is already pricing in a meaningful slowdown.

If analysts are correct and 2028 non-GAAP EPS reaches $2.77, applying today’s depressed NTM P/E of approximately 19.4 would imply a stock price of roughly $54 by the end of 2027.

From today’s price of $38.12, that would represent a return of approximately 42%.

If, however, TTD is able to achieve an EPS CAGR closer to 20% over the next three years—still below its historical growth rate, but above current consensus—EPS would reach roughly $3.08 by 2028, assuming a 2025 EPS base of $1.78.

Applying a NTM P/E multiple of 37, which is one standard deviation below the company’s three-year average P/E of 51.2, would imply an end-of-2027 stock price of approximately $113.

That would represent a potential return of roughly 197% from current levels.

TTD three year NTM PE

That scenario does not require a return to peak growth or peak valuation—only a partial normalization.

With pessimistic growth assumptions and a compressed valuation, downside appears limited, while upside remains substantial if growth only modestly re-accelerates.

Risks

The two main risks to the thesis are probably the following:

• Prolonged macro weakness in advertising spend

If we assume the decline in growth rates is temporary rather than structural, continued macro weakness could still pressure TTD’s future growth.

TTD’s revenues have historically been sensitive to macro shocks. For example, in Q2 2020, quarterly growth turned negative at roughly -13% due to the pandemic.

• Walled gardens increasingly connecting advertisers with third-party inventory

This would occur if Amazon or Google increasingly expanded access to ad inventory beyond their own ecosystems.

In that scenario, TTD’s moat—its breadth and reach across the open internet—could weaken over time.

Still, despite these risks, I believe the current risk–reward setup looks fairly attractive. I therefore rate the stock as a Strong Buy.

Disclosure: I am long The Trade Desk at the time of writing.

This article reflects my own analysis and how I think about long-term business fundamentals and risk–reward. It is not a recommendation to buy or sell securities.

If you enjoyed this deep dive, consider subscribing or sharing it—and feel free to leave questions or counterarguments in the comments.

Subscribe now

Have you ever wondered how all these injectable drugs are actually administered?
Enter Ypsomed — the Swiss company that is a leader in the global market for the devices used to deliver such medications.

Ypsomed is the one-stop shop for pharmaceutical companies developing drugs that must be injected rather than swallowed. While companies like Novo Nordisk still manufacture many of their delivery systems in-house, the trend is clearly toward outsourcing — and Ypsomed is the main beneficiary.

That shift stems from the increasing complexity of injection devices and the rapid rise of biologic drugs. For every new drug that comes to market, a regulator-approved delivery mechanism is required.

In this article, I’ll explain why Ypsomed is such an attractive business — and potentially a long-term compounder hiding in plain sight.

What Ypsomed Does

Ypsomed designs and manufactures injectors for the delivery of biologic medicines.
Their product line is fairly simple: autoinjectors and injection pens.

An autoinjector is a single-use device that hides the needle and administers a fixed dose at the push of a button — conceptually similar to the injection pens used for GLP-1 drugs like Ozempic or Wegovy.

An injection pen, on the other hand, is reusable. It uses replaceable cartridges and allows for flexible dosing, making it suitable for treatments that require regular injections.

Today, the global injector market is effectively a duopoly-like market. Most industry watchers still list SHL Medical and Ypsomed as the two leaders; who’s “leading” depends on the segment/metric.

In 2024, Ypsomed made a strategic decision to focus entirely on its Delivery Systems division, selling its Diabetes Care unit to Tecmed. The Delivery Systems segment currently generates about CHF 500 million in annual revenue and has grown at roughly 24% CAGR over the past five years.

The Growth Engine: The Biologics Revolution

Consensus expectations call for strong growth ahead, primarily driven by the global expansion of biologic medicines.

Biologic drugs are made from living cells or organisms, rather than being chemically synthesized like traditional medicines. They consist of large, complex proteins that closely resemble those found naturally in the human body. These molecules can target specific receptors or proteins involved in a disease process — allowing for more precise and effective treatments.

Because biologics can act with far greater precision, their share of the global drug market has risen sharply. In 2005, less than 20% of newly approved drugs were biologics; in 2022 that figure was 40% and today it’s more like 50%.

The popular GLP-1 treatments — Ozempic and Mounjaro — are also biologics. They mimic the GLP-1 hormone, which is naturally produced in the gut and helps regulate appetite and digestion.

As healthcare systems push for more at-home treatments, Ypsomed’s devices are becoming increasingly needed.

The Threat of Oral Alternatives

In September 2025, Novo Nordisk announced that its new oral GLP-1 pill produced “significant weight loss”. Since that announcement, Ypsomed’s share price has slipped about 25%.

Eli Lilly , Novo Nordisks main competitor, had already published results for its own oral candidate, Orforglipron, which showed lower efficacy than the injectable Zepbound. Novo’s oral version (announced in september) performed slightly better than Orforglipron — but still worse than injections.

Patients have grown comfortable with weekly injectors: the needle is hidden, the process is simple, and the results are stronger. If injections deliver better outcomes, why switch to a pill that must be taken daily?

There will certainly be a market for pills, but neither Novo Nordisk nor Lilly wants to cannibalize its lucrative injectable business. Type-2 diabetes has long shown that oral and injectable treatments can coexist — and the same pattern will likely emerge in obesity care.

Even Martin Lange, Novo Nordisk’s Chief Scientific Officer, agrees: “The injectable will continue to be the biggest seller, but the oral will be a substantial segment.”

Injectables will remain the stronger option for patients who need maximum weight reduction or tighter glucose control. Pills will cater to lighter cases or those unwilling to inject.

Even if the advent of pills takes a small slice of growth, 27 blockbuster biologic drugs are expected to lose patent protection between 2025 and 2030.

Biosimilar manufacturers, which compete primarily on cost, generally lack in-house device manufacturing capabilities and will therefore depend on companies like Ypsomed for injectors.

27 biologic molecules (drugs) are facing loss of patent. Source: Ypsomed capital markets day presentation.

And these biosimilars can’t be made into pills. By regulation, a biosimilar must be structurally and functionally equivalent to the original drug. If the originator is a protein delivered via injection, the biosimilar must follow the same route.

So yes — part of the GLP-1 market may shift toward pills. But injectables and orals will coexist, each serving its own segment. And Ypsomed still has a vast growth runway supplying the delivery systems behind the next generation of biologics.

Economics & Moat

At first glance, an autoinjector seems simple — just a spring-loaded needle that pushes medication under the skin. In reality, it’s a high-precision mechanical system where even small deviations in spring force, needle motion, or injection speed can cause the dose to fail.

That’s why injector design is tightly regulated. A new manufacturer would face 5–8 years of development and approval work and tens of millions in costs before bringing a product to market.

Ypsomed, by contrast, has decades of experience and operates a platform model:
the base injector design is already pre-approved, and only small adaptations are needed for each new drug. This dramatically shortens time-to-market for pharma companies who are developing a new drug.

Importantly, when the FDA or EMA approves a drug, it approves it together with its injector. That means pharma companies can’t simply swap delivery systems without restarting the entire approval process — creating strong lock-in for Ypsomed.

During the development phase, pharma clients pay Ypsomed “project revenue” for engineering work. Once the drug is commercialized, Ypsomed earns per-unit fees — that’s when the real profits start rolling in. Ypsomed refers to that revenue as commercial sales revenue.

At the moment, Ypsomed has zero commercial sales revenue from the incretin market (glp1 medicines). Even taking into account all the new growth in GLP 1, the company projects incretin to be approximately 30% of commercial sales in the midterm. This is an important point, because the market still thinks Ypsomed is really dependant on Novo Nordisk.

GLP-1 medicines will only be around 30% of total commercial sales in the midterm.

Growth Outlook

In the year ending March 2025, Delivery Systems revenue rose 30.4%, accelerating from a five-year CAGR of 24%. Management guides for CHF 1 billion revenue by 2029/30, implying about 15% annual growth. They target EBIT margins of 30% — roughly in line with today’s levels.

Personally, I think that forecast is conservative.

Given the strength of the biologics pipeline and the upcoming wave of biosimilars, it does not make much sense to me that growth would slow relative to the past five years.

Valuation

Earnings per share will jump sharply in FY 2025–26, boosted by the sale of the loss-making Diabetes Care unit to Tecmed.

Per Koyfin data , the next twelve months (NTM) pe ratio is 23.9. In the last 5 years, the stock has traded around a 40 NTM pe, so it’s quite cheap relative to it’s historical valuation.

For a business growing 15–20% annually with 30% EBIT margins, that looks very reasonable.

Subscribe now

Why So Cheap?

The problem is that the market still appears to view Ypsomed as a company heavily dependent on Novo Nordisk.

As mentioned earlier, the stock fell sharply following the announcement of the oral Wegovy trial results. Investors seem to believe the threat from oral pills is immediate—which, as we discussed earlier, is far from the case.

You can also clearly see that Ypsomed’s share price has largely tracked Novo Nordisk’s decline since July 2024, when Novo’s stock started falling.

I believe Ypsomed could rebound strongly once the market realizes that the company is not solely dependent on Novo Nordisk or GLP-1 drugs.

Ypsomed share price declines in tandem with Novo Nordisk.

Risks

The main risks to the thesis, in my view, are the following:

• Production-line delays

Ypsomed depends on external suppliers for the delivery of assembly lines. Delays in these deliveries could temporarily slow capacity expansion.

• Margin pressure during scale-up

High CapEx spending and the ramp-up of new production facilities could weigh on margins in the near term.

• Cash-flow timing

Due to heavy ongoing investments, free cash flow is unlikely to turn positive until FY 2028/29 (Source: Ypsomed). This could become a risk if credit markets tighten or if a broader economic downturn occurs.

• Threat from oral pills

At the moment, I believe this risk is likely overstated, but it remains something investors are focused on.

• Dependence on pharma clients’ drug success and launch timing

If a significant number of drugs currently in clinical development fail to receive approval, Ypsomed could generate lower commercial revenues in the future.

Key Takeaway

Ypsomed is at the start of a multi-year growth runway, fueled by the global rise of biologic medicines. With 30% margins, mid-teens to 20% growth, and a NTM P/E of ~24, the risk-reward looks attractive.

As more pharma companies outsource injector production and the market realizes Ypsomed’s limited dependence on Novo Nordisk, the stock could rerate sharply higher.