What Happened?
Shares of online community and discussion platform Reddit (NYSE: RDDT) jumped 4.4% in the afternoon session after a wave of bullish analyst ratings reaffirmed confidence in the company's advertising monetization potential.
Investment firm Citizens maintained its "Market Outperform" rating and a $300 price target. The firm's analysis suggested there was "ample room to drive revenue outperformance" as Reddit's advertising tools mature, expecting earnings to "materially outperform." Adding to the positive sentiment, Piper Sandler also reiterated its "Overweight" rating on the stock. This optimism reflected a broader trend among analysts, which helped the stock recover from a recent drop.
After the initial pop the shares cooled down to $207.09, up 3.1% from previous close.
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What Is The Market Telling Us
Reddit’s shares are extremely volatile and have had 65 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 2 days ago when the stock dropped 9.9% on the news that reports surfaced that OpenAI's ChatGPT was not using the social media platform's data as much as investors had anticipated. Concerns gained traction on the social media platform X, where multiple posts cited data from PromptWatch and Similarweb, suggesting ChatGPT was not heavily drawing on Reddit's content. The market reacted to fears that the company's data licensing partnership was less valuable than previously thought.
Reddit is up 24.9% since the beginning of the year, but at $207.09 per share, it is still trading 23.5% below its 52-week high of $270.71 from September 2025. Investors who bought $1,000 worth of Reddit’s shares at the IPO in March 2024 would now be looking at an investment worth $4,109.
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