Laffont's Big Bet: Dumps TTD, Goes All-In on Netflix

Billionaire investor Philippe Laffont's Coatue Management, which manages $40.8 billion, made two dramatic moves in the fourth quarter. The hedge fund completely exited its position in The Trade Desk (TTD), a once-high-flying ad-tech company that has seen its stock plummet 67% over the past year.

At the same time, Coatue increased its stake in Netflix (NFLX) by a staggering 17 times. This represents a huge vote of confidence in the streaming giant, whose stock has also faced pressure, falling 43% since last June.

The Trade Desk's decline stems from growing threats from AI-powered advertising platforms and larger competitors like Amazon, which have been stealing market share. Despite the company reporting strong revenue and earnings growth through 2025, investor sentiment has turned sharply negative.

Netflix's recent struggles are tied to its controversial agreement to acquire Warner Bros. Discovery's film and television studios, including HBO Max. The deal faces significant uncertainty due to potential antitrust concerns and competition from Paramount Skydance.

When a fund manager of Laffont's caliber makes such extreme moves, it signals a major shift in conviction about these companies' futures. His complete exit from TTD suggests he sees fundamental challenges that outweigh the stock's now-cheaper valuation.

For The Trade Desk, the concern is that its competitive moat is eroding. The stock has seen its valuation multiples compress dramatically—from 80 times forward earnings at its peak to just 12 times today—indicating that investors no longer see the same growth trajectory.

Laffont's massive Netflix bet represents a classic "buy when there's blood in the streets" approach. He's betting that the market is overreacting to short-term deal uncertainty while underestimating Netflix's underlying strengths.

This move also highlights the ongoing transformation in the streaming wars. Consolidation appears inevitable, and Laffont is positioning himself to benefit if Netflix emerges as the dominant player through strategic acquisitions.

The contrasting moves show how even successful tech companies face different risk profiles—TTD faces existential competitive threats, while NFLX's challenges appear more tactical and potentially temporary.