Reddit Stock Surges on AI and Ad Revenue Growth—What Investors Need to Know
Alright, let’s talk about Reddit stock (RDDT) and why it’s making headlines. If you've been keeping an eye on the markets, you probably know that Reddit has been on an absolute tear. The stock is up more than 33% since the start of 2025 and a staggering 363% from February 2024 —outpacing even some of the biggest names in tech. So, what’s driving this momentum?
The biggest factor here is AI-driven growth and a booming ad business . Investors and analysts alike are focusing on Reddit’s ability to monetize its vast user base. The company has been expanding its advertising revenue and striking big AI licensing deals , making it a key player in the artificial intelligence space.
Wall Street has high expectations for Reddit’s Q4 earnings report , set to drop after the bell today. According to analysts, the company is projected to post:
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- $0.48 in adjusted diluted earnings per share
- $405.5 million in revenue
- 103.8 million daily active users
Now, here’s where it gets really interesting: Reddit is not just a social media company anymore—it’s an AI play. Last year, Reddit announced a partnership with OpenAI , allowing OpenAI to train its models using Reddit’s vast content. It also has a $60 million per year licensing deal with Google , further cementing its position in the AI space.
These moves have significantly boosted Reddit’s revenue, with the company consistently beating earnings expectations since its IPO. In fact, back in October, Reddit reported its first-ever profit as a public company, which sent shares soaring.
Analysts are bullish, too. Raymond James, Deutsche Bank, and Jefferies all have Buy ratings on Reddit stock. Just this week, Raymond James analyst Josh Beck raised his price target on RDDT to $250 from $200 , while Deutsche Bank’s Benjamin Black upped his target to $235 from $195 . They’re pointing to strong ad revenue, AI licensing deals, and international expansion as key growth drivers.
Another thing to watch is Reddit’s AI-powered search tool , launched in December. Analysts believe this could give Reddit an edge in the digital advertising space. Deutsche Bank’s Black even called Reddit’s AI capabilities a sign of " AI-driven durability ," reinforcing confidence in the company’s long-term growth.
Reddit is also benefiting from a strong digital ad market , with companies like Snap, Pinterest, Meta, and Google posting solid ad revenue numbers. This is a great sign for Reddit, as advertisers continue to spend more on social media and AI-powered platforms.
So, what’s the takeaway here? Reddit is no longer just a forum for memes and market chatter—it’s a serious contender in tech, AI, and digital advertising. With a growing user base, expanding revenue streams, and a solid AI strategy, it’s no surprise that Wall Street is bullish on this stock.
Now, all eyes are on today’s earnings report. If Reddit delivers another strong quarter, expect more fireworks in the stock price. Stay tuned! 🚀
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