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Reddit: Back In The Game

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  • Reddit, Inc. has retraced its gains as initial AI and user growth enthusiasm faded.
  • The social media company has more normalized growth, with logged-in users only growing 7% YoY in Q1'26 and key U.S. users reporting sub-10% growth.
  • RDDT's ability to capture a larger share of the AI opportunity is a key forward driver, but the company isn't expected to see any material increase in data licensing fees.
  • The stock is increasingly becoming more attractive at 20x forward EPS targets with more normalized earnings.
Reddit, Inc. (RDDT) made a complete roundtrip the last year as the original excitement over AI and user growth collapsed. The stock is no longer expensive, with the valuation more reasonable now and potentially very attractive with the social media company grabbing a larger share of the AI pie. My investment thesis is turning more Bullish on Reddit.


Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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