In response to an analyst’s question about how Reddit plans to convince more people to create accounts and routinely use its app, Huffman reiterated previous comments about improving the platform’s user experience. This subreddit’s purpose is to analyze, discuss, and participate in stock market related areas. Please search before posting to help us cut down on repetitive posts.
Interpreting Analyst Sentiment
There’s lots of green shoots to spot at the start of Friday’s trading session, brought by earnings beyond Big Tech. Diane King Hall notes Reddit’s (RDDT) strong rally backed by massive momentum in sal… Australia’s internet watchdog on Wednesday widened its world-first teen social media ban to include Reddit and video live streaming platform Kick, and said more sites could be added if their main role…
- 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 stock jumped 19.4% over a three-day period during the Cannes festival.
- The way people discover, discuss, and act on investment ideas has fundamentally changed.
- The company’s forecast for Q4 adjusted EBITDA was $280 million at the midpoint, ahead of the $258 million expected.
AI developers are willing to pay for this because it helps them build better, more accurate AI models. This move positions Reddit not just as a social media company, but as a provider of essential data for the future of technology. You can see how this data is being used in various applications, much like how people use Google Block Breaker for fun, this data is being used for serious development. The connection to artificial intelligence has undeniably boosted Reddit’s market perception. The company’s vast amount of user-generated data is seen as a valuable asset for training AI models.
Mastering Your Investments: The Essential Formula for Return on Investment (ROI)
The company’s performance in the second quarter suggests a positive trajectory, with key financial metrics showing considerable year-over-year improvement. Investors broadly moved out of growth-dependent stocks this week as valuation concerns and macroeconomic risk factors came into focus. While investors recently got a long-awaited interest rate cut from the Federal Reserve, there have also been some potential warning indicators. The company’s share price fell 9.2% in a stretch of trading that saw the S&P 500 fall 0.3% and the Nasdaq Composite decline 0.7%. Reddit’s daily active user numbers fell below expectations earlier this year due to changes in Google’s algorithm that affected the platform’s traffic. CEO Steve Huffman said in May that „the near term could be more bumpy than usual.“
The platform is improving its ad products, which seems to be helping advertisers see better results. Reddit Co-Founder and CEO Steve Huffman joins ‚Mad Money‘ host Jim Cramer to talk quarterly results, user trends, growth opportunities and more. The social-media platform is reaping the benefits of its globalization effort, and there’s room for more international growth ahead. Reddit (RDDT) remains a top growth story, with robust user and revenue expansion driving a fresh rally and justifying a continued buy rating.
Everyone’s talking about it, and if you’re looking at your portfolio, you might be wondering what’s actually going on. It’s more than just a place for memes and hobby groups now; it’s becoming a real player in the tech world, especially with all the AI buzz. Let’s break down what this latest reddit stock news means for investors trying to make sense of it all. The first is Reddit Insights, a tool that gives marketers real-time insights based on Reddit’s 20 years of What Is the S&P 500 conversations to help them plan campaigns and make better decisions. The second is Conversation Summary Add-ons, an ad feature that integrates positive content from Reddit users directly below an advertiser’s post. Big investment firms often buy or sell large blocks of shares, and these transactions can signal their confidence (or lack thereof) in a company.
Understanding Reddit’s Evolving Business Model
Reddit reported third-quarter earnings on Thursday in which the company beat on the top and bottom and provided strong guidance. The big news around Reddit last month was its introduction of Reddit Community Intelligence, which it unveiled at the Cannes Lions Festival. The new platform, which the company described as the „collective knowledge from the billions of human conversations across Reddit,“ has two main features. The most serious place on Reddit for Stock related discussions! Don’t hesitate to tell us about a ticker we should know about, market news, or financial education.Check out our WIKI that has beginner & advanced topics on both investing & trading. It started as just a place for people to chat about hobbies, but now it’s becoming important for advertisers who want to reach specific groups of people.
Reddit shares rise on earnings beat, strong forecast
- Online forums have always influenced financial markets to some degree, but the scale and speed seen with platforms like Reddit are unprecedented.
- Sometimes discussions on Reddit can get really hyped up, causing stock prices to jump around a lot.
- Reddit is well-positioned for growth and profitability, driven by strong Q3 results, robust user engagement, and AI training deal optionality.
- Reddit (RDDT) remains a top growth story, with robust user and revenue expansion driving a fresh rally and justifying a continued buy rating.
This suggests investors are paying a premium, expecting significant future growth. Compared to more traditional social media platforms, Reddit is priced more like a company involved in AI infrastructure. This premium is largely tied to the AI narrative, meaning its valuation could shift if that enthusiasm cools. Reddit’s daily active users (DAUs) rose 19% to 116 million during the third quarter from the same period last year.
Reddit forecast fourth-quarter revenue above Wall Street estimates on Thursday, thanks to its artificial intelligence-powered advertising tools that are boosting marketing spending on the social media… Reddit stock jumped after the social media company topped earnings and issued an upbeat forecast. Investors have been watching for any changes to Reddit’s user growth amid Google increasingly debuting generative AI features like AI Overview, which provides summaries to search questions. Reddit has seen a wave of users come to its platform from Google, and the social media company makes more advertising-related money from users who create accounts. Reddit shares jumped more than 12% on Friday after the social media company posted third-quarter results that exceeded Wall Street estimates and delivered an upbeat outlook for the current quarter. The company’s better-than-expected traffic in Q3 was driven by international users.
Examining Key Valuation Multiples
When looking at Reddit’s stock, it’s helpful to see what the pros are saying. Analysts offer their views on where the company is headed and what the stock might be worth. These opinions can give us a good idea of how the market is feeling about Reddit right now. It’s not just a place for online chats anymore; it’s becoming a serious player in a few key areas that are important for investors to watch. Think of it as moving beyond just being a social hub to becoming something more like essential infrastructure for other businesses, especially in the AI world. Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business.
Reddit reported earnings per share of $0.80 during the quarter, up from $0.16 in the year-ago period, when the company reported its first profit as a publicly traded company. Reddit CEO Steve Huffman told analysts on Thursday that the company is not currently seeing any major traffic from AI-powered chat apps. Third-quarter revenue in the U.S. came in at $480 million, surpassing StreetAccount estimates of $445 million. Reddit generated international third-quarter sales of $105 million, ahead of the $104 million that StreetAccount projected.
This transition is a big deal because it opens up entirely new ways for Reddit to make money, separate from just showing ads. Reddit has been licensing its data for the training of AI models, and this new source of revenue has transformed the company’s growth trajectory. The company’s social media platform is currently one of the leading destinations for the training of large language models. Whether the company continues to see sales growth hold strong at current levels or continue to accelerate remains to be seen, but the company’s growth engine undeniably has some promising catalysts right now. The social media platform also gave a more optimistic fourth quarter revenue and earnings outlook than analysts anticipated.