Wedbush Flags Ad-Tech Firms as Potential AI Losers
## Executive Summary
Investment firm **Wedbush** has identified several technology companies, including **Pinterest (PINS)**, **The Trade Desk (TTD)**, and **Nice (NICE)**, as "potential AI losers" in an analysis extending to 2026. The firm's assessment highlights that despite the broad enthusiasm for artificial intelligence, certain companies face structural disadvantages and competitive pressures that may inhibit growth. The analysis underscores a growing bifurcation in the market between clear AI winners and companies struggling to define their strategic position and demonstrate a return on AI-related investments.
## The Event in Detail
Wedbush downgraded **Pinterest** to a "Neutral" rating, citing "limited visibility into catalysts that could meaningfully reaccelerate growth." This assessment comes as Pinterest attempts to expand its advertising footprint, notably through its acquisition of the CTV ad-tech company **tvScientific**. However, the strategy faces headwinds, including advertiser skepticism and technological hurdles. According to an April 2025 Adobe survey, only 29% of U.S. business owners believe shoppable Pins significantly improve ad campaign performance. Furthermore, the reliance on IP addresses for cross-device attribution carries long-term regulatory risks that could undermine the acquisition's value.
For **The Trade Desk**, Wedbush flagged a significant structural disadvantage. The firm's concern centers on the increasing consolidation of advertising spending within "closed online ecosystems" controlled by tech giants. This trend threatens TTD's model, which operates on the open internet, potentially siphoning off valuable ad revenue and limiting its market access.
## Market Implications
The analysis from Wedbush suggests a more discerning phase in the market's evaluation of AI. While the AI infrastructure buildout has fueled a surge in stocks like **Nvidia (NVDA)**, investors are now applying greater scrutiny to the actual return on investment (ROI). The recent stock declines of infrastructure players like **Oracle (ORCL)** and **Broadcom (AVGO)** indicate that high capital expenditures on AI require a clear and profitable application. For companies like Pinterest and The Trade Desk, the challenge is to prove that their business models can effectively compete and generate new revenue streams in an AI-dominated landscape rather than simply incurring higher costs.
## Expert Commentary
According to Wedbush analysts, the core issue for these potential "AI losers" is a combination of intense competition and a lack of a distinct, defensible AI-driven strategy. The downgrade of Pinterest reflects a belief that its current initiatives may not be sufficient to drive the growth expected by the market. Similarly, the concerns about The Trade Desk are rooted in a fundamental market shift that favors large, integrated platforms.
This sentiment is echoed by broader market concerns about the sustainability of AI-related spending. As noted by Matt Witheiler, head of late-stage growth at Wellington Management, "It definitely requires the ROI to be there to keep funding this AI investment." Companies unable to demonstrate this ROI may fall behind.
## Broader Context
The current environment is creating a clear divide between AI leaders and potential laggards. While some companies are successfully integrating AI to enhance their products and drive revenue, others are finding it difficult to adapt. The situation highlights that merely participating in the tech sector is not a guarantee of success in the AI era. Companies in competitive sectors like digital advertising must innovate beyond traditional models to avoid being marginalized by larger platforms with deeper pockets and more extensive data ecosystems. The market is transitioning from rewarding AI-related announcements to demanding measurable, AI-driven financial results.
