What Happened?

Shares of online community and discussion platform Reddit (NYSE: RDDT) jumped 5.1% in the morning session after the major indices rebounded (Nasdaq +1.5%, S&P 500 +1.0%) as reports pointed to easing tensions between Israel and Iran. The Wall Street Journal said senior Iranian officials had signaled a willingness to restart stalled nuclear talks, on the condition that Washington refrain from joining Israel's ongoing strikes. 

This development triggered a significant decline in oil prices, easing inflation concerns. Also, it is possible some investors were buying the dip following the sell-off at the end of the previous week.

After the initial pop the shares cooled down to $123.95, up 4.9% from previous close.

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What The Market Is Telling Us

Reddit’s shares are extremely volatile and have had 61 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 28 days ago when the stock dropped 5.1% after Wells Fargo downgraded the stock from Buy to Hold, raising concerns as Google prepares to fully integrate generative AI into its platform. The firm noted that recent disruptions in search-driven traffic appear more permanent, as more users turn to AI-powered search.

Reddit is down 25.3% since the beginning of the year, and at $123.95 per share, it is trading 45% below its 52-week high of $225.23 from February 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 $2,457.

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