Expert Insights: Reddit (RDDT) Embarks on Its AI Journey – What’s the Potential for Growth?

Overview of Buzzing Stocks After Recent Earnings Season

We have recently compiled a list of 10 stocks that have generated significant attention in the market following the latest earnings season. In this article, we will focus on Reddit, Inc. (NYSE:RDDT) and compare its performance among the other notable stocks during this earnings period.

Impact of the US-China Trade Deal

The markets reacted positively to a recent trade agreement between the United States and China, which will lead to a substantial reduction in tariffs on imports between the two countries for a duration of 90 days. This agreement effectively undermines many bearish scenarios that Wall Street analysts had anticipated regarding the impact of tariffs on the markets.

Expert Insights on the Trade Agreement

Sylvia Jablonski, the CEO and CIO of Defiance ETFs, referred to this trade deal as a “game changer” during a segment on CNBC. She noted several factors that contributed to the urgency of the agreement from both sides.

“I think both countries probably saw a little bit of the demise of what would be here with a non-tariff deal as the data came in. You had numerous complaints surrounding China across various sectors, and simultaneously, U.S. retailers were reaching out to President Trump expressing concerns about empty shelves, alongside significant anxiety regarding semiconductor and software companies. Ultimately, this is a turning point for both nations. The key takeaway is that both appear to have decided against decoupling, indicating that making America great may also mean maintaining a relationship with China.”

Analyzing Hedge Fund Sentiment

In our analysis, we selected 10 stocks that are currently making waves during this earnings season. For each stock, we provide insights into the latest sentiments from hedge funds. Investing in stocks that hedge funds favor has proven to be a lucrative strategy; our research suggests that mirroring the best stock picks from top hedge funds can lead to superior market performance. Our quarterly newsletter highlights 14 small-cap and large-cap stocks each quarter and has achieved a 373.4% return since May 2014, outperforming benchmarks by an impressive 218 percentage points.

Copyright: dolgachov / 123RF Stock Photo

Number of Hedge Fund Investors: 52

Reddit’s Unique Position in Social Media Advertising

Megan Brantley from LikeFolio discussed Reddit, Inc. (NYSE:RDDT) and its distinctive position among social media platforms, particularly in the advertising sector. She highlighted how Reddit’s platform is structured and the unique manner in which consumers interact with it.

“Reddit occupies a unique space compared to many other companies in our usual comparisons, largely due to its platform design and consumer engagement. I would liken Reddit to Pinterest in terms of having a dedicated audience focused on specific topics and objectives. However, Reddit may have the edge because its content is predominantly text-based rather than image-centric, which could explain the significant traction we’ve seen in its advertising efforts.”

The Growth Potential of Reddit, Inc.

Boasting over 80 million daily active users, Reddit Inc (NYSE:RDDT) is among the fastest-growing social media platforms globally. While competitors like Facebook and Twitter are experiencing maturing growth trends, Reddit continues to show considerable upside as users increasingly flock to its discussion boards for genuine opinions and dialogue. The platform’s user-generated content comprises insights from millions on a wide range of topics, creating a robust moat for Reddit Inc. As of 2023, users have posted a staggering 16 billion comments on Reddit, underscoring its engagement levels.

Partnerships and Licensing Agreements

Reddit Inc (NYSE:RDDT) has capitalized on its data’s value by entering into licensing agreements, most notably with Alphabet Inc.’s Google, which is valued at $60 million. These agreements are intended to aid in the training of large language models and total $203 million in licensing deals over the next two to three years. The company reported approximately $20 million in revenue from AI content deals in the previous quarter and anticipates surpassing $60 million by year-end.

Investment Perspectives on Reddit, Inc.

Munro Global Growth Small & Mid Cap Fund recognized Reddit, Inc. (NYSE:RDDT) in its Q4 2024 investor letter, noting: “Key contributors to performance during the quarter were Reddit and AppLovin. Reddit, Inc. delivered compelling results with significant revenue growth and improving operating margins. In an era where misinformation and AI-generated content are rising concerns, Reddit’s unique position as a platform hosting a vast volume of meaningful human conversations is becoming increasingly valuable.”

Conclusion: Reddit’s Position Among Buzzing Stocks

In summary, RDDT ranks 7th on our list of notable stocks following the latest earnings season. While we recognize the investment potential associated with RDDT, we believe that lesser-known AI stocks may offer even greater opportunities for substantial returns in a shorter timeframe. There exists another AI stock that has shown considerable growth since the start of 2025, as opposed to many popular AI stocks which have seen a decline of roughly 25%. For investors seeking a promising AI stock trading at under five times earnings, further details can be found in our report on the most affordable AI stock available.

Further Reading

For those interested in expanding their investment insights, we recommend the following articles: “20 Best AI Stocks To Buy Now” and “30 Best Stocks to Buy Now According to Billionaires.”

Disclosure: None. This article is originally published with no affiliations noted.