The cord-cutting trend has accelerated due to COVID-19, and roughly 55% of Americans are reportedly set to cut the cord by 2022. Increasing numbers of consumers have turned to streaming, and where consumers' eyeballs go, advertisers will follow. This has created a tailwind that is likely to be enduring and benefits both Roku (NASDAQ: ROKU) and The Trade Desk (NASDAQ: TTD), but which stock is a better buy today?

Roku: Bull v.s. Bear arguments: 

Roku allows users to watch several streaming services and channels all in one place and is either embedded into a smart TV or plugs into a TV via an HDMI cable.

While Roku sells hardware in the form of its streaming players and licensing its platform, the majority of its revenue now comes from its advertising business. It has positioned itself well by partnering with other streaming services such as Netflix, Disney, Amazon video, and more. Roku now has  

In Q3 2021, revenue increased by 51% year-over-year (YoY), reaching $680 million, with average revenue per user (ARPU) hitting $41.10. The company also posted a profit of $68.9 million. Roku has proven its ability to expand internationally and is the number one streaming platform in Mexico. It still has ample opportunity in other countries and was recently launched in Germany. 

Similar to many other companies, Roku has not been immune to supply chain issues which caused active account growth to slow, adding only 1.3 million users in the quarter. Roku has also faced issues regarding licensing agreements with tech giants Alphabet and Amazon about having their apps on Roku. 

The Trade Desk: Bull v.s. Bear arguments: 

The Trade Desk is a programmatic advertising platform operating on the buy-side and was founded in 2009 by visionary CEO Jeff Green. It provides a neutral alternative to the "walled gardens" such as Meta and Alphabet.

The Trade Desk reported revenue growth of 39% YoY, reaching $301 million in Q3 2021, exceeding internal expectations. Despite tough comparables due to the ad spend in the U.S. election in 2020. The company also continues to reap the rewards of its focus on connected TV which now makes up 40% of its revenue. It has been profitable since 2013 and reported a net income of $59.4 million in Q3.

Its growth has been particularly impressive as it has implemented Unified ID 2.0 to combat Apple's IDFA changes. It also has an extremely impressive customer retention rate of 95%+, demonstrating its stickiness and value to its customers. 

The Trade Desk stock is not cheap, trading at over 40X sales which will require further excellent execution. The company also faces stiff competition from the big tech, who remain the dominant players. 

So, which stock is a better buy right now? 

Both companies are likely to continue to produce market-beating returns and could be an excellent addition to a portfolio. However, The Trade Desk, under Jeff Green's leadership and ability to navigate recent challenges, makes it a better investment today.

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