06:32 AM EDT, 07/15/2025 (MT Newswires) -- Trade Desk ( TTD ) shares jumped early Tuesday after it was announced that the ad-buying software maker will be joining the S&P 500 later this week, a move that Wedbush Securities said reflects the company's leading position in the digital advertising industry.

Trade Desk ( TTD ) will replace Ansys (ANSS) in the benchmark equity index, effective before the market opens Friday, S&P Global (SPGI) division S&P Dow Jones Indices said late Monday. The adjustment follows Ansys' planned acquisition by Synopsys (SNPS), expected to be completed on Thursday.

Shares of Trade Desk ( TTD ) climbed 15% in Tuesday's most recent premarket activity.

"We think the perception around the company has improved modestly in recent months, and the announcement supports our conviction in the company's position as a leading player in the digital advertising space," Wedbush said in a late Monday client note.

The brokerage believes investor sentiment surrounding Trade Desk ( TTD ) has been more positive following the first quarter, as remarks from senior management may have eased concerns related to competition, execution risk and the ultimate size of the firm's long-term prospects. Wedbush sees limited downside for the company from here and expects it to continue to take share of global digital advertising budgets in 2025.

"Our bias for future estimate revisions continue to skew positively as the company has established a multi-quarter track record of exceeding guidance," Wedbush analysts Scott Devitt and Matthew Weiss wrote in the note.

The brokerage sees various drivers of long-term growth for Trade Desk ( TTD ), including ongoing shifts in budgets to connected TV from linear, scaling of key partnerships with leading streamers and content providers, an improving programmatic supply chain and persistent international gains.

Wedbush expects the company to continue to repurchase shares given its "healthy" free cash flow profile. The company is positioned to generate about $800 million in free cash flow in 2025, driven by rising absolute dollar profit despite projected compression of its adjusted earnings before interest, taxes, depreciation and amortization margin, according to Devitt and Weiss.

The brokerage reiterated its outperform rating on Trade Desk's ( TTD ) stock and maintained its 12-month price target of $86.