As of March 18, 2025, Reddit, Inc. (Nasdaq: RDDT) is experiencing significant turbulence in its stock price, reflecting broader market dynamics and specific concerns about the company’s valuation and growth prospects. At 10:28:10 AM EDT, RDDT was trading at $111.66, down $13.91 or 12.45% from its previous close of $125.56. With a trading volume of over 4.16 million shares, the stock opened at $120.57 and fluctuated between a daily low of $111.16 and a high of $121.94. This sharp decline comes amidst a volatile period for the broader market and heightened scrutiny of Reddit’s financial outlook.

A Rollercoaster Ride in 2025

Reddit’s stock has been a wild ride since its initial public offering (IPO) in March 2024. Over the past 52 weeks, RDDT has seen a low of $37.35 and a peak of $230.41, showcasing both its potential and its susceptibility to dramatic swings. The stock enjoyed a remarkable run in 2024, climbing 286% year-to-date by early 2025, fueled by strong revenue growth and optimism about its role in the social media and data markets. However, 2025 has brought challenges, with the stock down roughly 23% year-to-date as of mid-March, according to some market analyses, and a staggering 52% drop over the past month alone.

This decline aligns with a broader market correction. The S&P 500 and Nasdaq Composite, which house many of Reddit’s tech peers, have both entered correction territory—down over 10% from recent highs—driven by concerns over tariffs, economic slowdown, and shifting investor sentiment. The Nasdaq, in particular, has shed 10.4% in 2025, with tech stocks like Reddit bearing the brunt of the sell-off.

Recent Performance and Analyst Perspectives

Reddit’s latest earnings reports have shown promise, with the company posting a 68% revenue increase in Q4 2024 and achieving GAAP profitability for the first time. Its Q4 results, released in February 2025, beat expectations with an EPS of $0.36 (versus $0.25 estimated) and revenue of $427.71 million (versus $405.26 million estimated). Despite this double beat, the stock fell 15.2% in after-hours trading, signaling investor unease about its sustainability.

Analyst coverage has added fuel to the fire. On March 17, 2025, Redburn Atlantic initiated coverage on RDDT with a “Sell” rating and a price target of $75—implying a 40% downside from its March 17 close. The firm argued that Reddit’s growth relies heavily on temporary boosts, such as increased visibility from Google Search, rather than a robust, structural advantage. Redburn highlighted Reddit’s valuation as overstretched, noting a 22x FY27 EV/adjusted EBITDA multiple (or 54x after stock-based compensation), a premium they deem “unsustainable” compared to peers like Alphabet and Meta. This bearish outlook contrasts with earlier bullish sentiment, where 12 out of 23 analysts rated RDDT a “Buy” over the past three months, with no “Sell” ratings until recently.

What’s Driving the Decline?

Several factors are contributing to Reddit’s current struggles:

1. Market Sentiment Shift: The broader tech sector is under pressure as investors reassess high-growth stocks amid economic uncertainty. Tariffs imposed by the Trump administration, weakening consumer confidence, and fears of inflation (with one-year expectations rising to 4.9% in March) have soured the mood for speculative investments like RDDT.
2. Valuation Concerns: Despite Reddit’s impressive 40% revenue growth and debt-free balance sheet—highlighted by some as a reason to buy—the stock’s lofty valuation has drawn skepticism. Its rollercoaster performance (surging in 2024, then dropping 50% from February to March 2025) suggests investors are grappling with its risk-reward profile.
3. Growth Vulnerability: Analysts like those at Redburn point to Reddit’s dependence on external factors, such as search engine traffic, and its unproven advertising model. While Reddit is working on direct-response ad capabilities, it trails giants like Meta and Alphabet, raising doubts about its ability to scale profitably.
4. Insider Activity: On March 13, 2025, Director David C. Habiger purchased 780 shares at approximately $126.07 each, boosting his holdings by 2.5% to 31,588 shares. This insider buying could signal confidence, but it has yet to stem the tide of selling pressure.

The Bigger Picture

Reddit remains a unique player in the social media landscape, boasting 73 million daily active users and $804 million in 2023 sales. Its data—spanning 100,000 communities—holds value for advertising and AI training, areas where it’s increasingly focusing. Yet, the stock’s trajectory in 2025 mirrors the broader market’s volatility. The S&P 500’s 7.6% seven-week slump and the Nasdaq’s 11% drop reflect a correction that has hit growth stocks hard, with Reddit caught in the crossfire.

Looking ahead, Reddit’s fate may hinge on its ability to diversify revenue streams and weather macroeconomic headwinds. The Federal Reserve’s upcoming decision on March 19, 2025, could provide clues about interest rate relief, potentially easing pressure on tech valuations. For now, though, RDDT investors are riding out a storm of uncertainty, with the stock testing support levels after a precipitous fall.

Reddit stock (Nasdaq: RDDT) is at a crossroads. Its fundamentals show growth potential, but its valuation and external risks have sparked a sell-off, driving today’s 12.45% drop to $111.66. Whether this marks a buying opportunity or a warning sign depends on one’s view of Reddit’s long-term story versus the short-term noise. As the market digests analyst downgrades and economic shifts, RDDT remains a stock to watch—volatile, polarizing, and emblematic of 2025’s tech reckoning.