What Happened?
Shares of digital advertising technology company PubMatic (NASDAQ: PUBM) jumped 3.3% in the morning session after Rosenblatt initiated coverage on the stock with a 'Buy' rating and a $17.00 price target. The price target suggests significant potential upside from the stock's recent price. In its note, Rosenblatt cited PubMatic's position as the third-largest supply-side platform (SSP) and noted the potential for the stock to more than double. The firm's bullish thesis is primarily driven by the expected remedies from Google's AdTech antitrust case, which Rosenblatt believes are likely to materialize in 2026, creating 'lots of conservatism arguing for even more upside potential.' Despite recent operational challenges, including a reduction in ad spending from a top partner that caused the stock to fall significantly on August 12, Rosenblatt views PubMatic as a 'meaningful and capable AdTech player.'.
After the initial pop the shares cooled down to $8.08, up 3.3% from previous close.
Is now the time to buy PubMatic? Access our full analysis report here, it’s free.
What Is The Market Telling Us
PubMatic’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock dropped 4.3% on the news that the major indices continued to pull back, with technology stocks accounting for most of the market's largest decliners. A key reason for this trend is that much of the recent market gains were concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Despite the downturn, some analysts viewed this as an opportunity to own some of the "Core AI winners." Dan Ives of Wedbush Securities commented, "In our view, the tech bull cycle will be well intact for at least another 2-3 years, given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor roadmap." Additionally, mixed earnings reports from retailers, such as Target, have added to the market's weakness. Investors are closely monitoring these reports for insights into the broader economic health and the potential impact of new tariffs on inflation.
PubMatic is down 45.5% since the beginning of the year, and at $8.08 per share, it is trading 52.8% below its 52-week high of $17.14 from February 2025. Investors who bought $1,000 worth of PubMatic’s shares at the IPO in December 2020 would now be looking at an investment worth $274.53.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
