By Reddit Inc. (NYSE: RDDT) shares climbed to an all-time high of $261.13 on Wednesday, marking a remarkable milestone for the social media company and reflecting robust investor enthusiasm.
The stock has delivered a one-year return of more than 350%, a gain that underscores strong confidence in Reddit’s growth trajectory and its rising influence in the competitive social media landscape.
The surge comes as Reddit continues to expand its user base and diversify its revenue streams, fueling optimism about its long-term potential.
With revenue climbing nearly 70% in the past 12 months, investors are rewarding the company’s ability to translate user growth into stronger financial results.
Strong earnings and user growth
Reddit’s latest financial performance played a pivotal role in its stock’s rapid ascent.
The company recently posted second-quarter earnings that surpassed Wall Street expectations, providing a solid foundation for investor optimism.
Revenue growth was accompanied by encouraging user metrics.
Global daily active users jumped 21% year-on-year to reach 110.4 million, a figure that exceeded analyst projections.
US user numbers remained stable, further reinforcing the platform’s ability to maintain a strong core base while expanding internationally.
The company also issued a favorable outlook for the third quarter, fueling expectations that momentum will continue in the second half of the year.
Reddit stock has gained over 60% since its results.
Analysts raise price targets
Analysts was impressed by the company’s Q2 performance.
Deutsche Bank raised its price target to $205 and maintained a Buy rating, emphasizing Reddit’s user growth and execution.
Morgan Stanley increased its target to $230, citing stronger-than-expected metrics, particularly in the US market.
RBC Capital maintained a Sector Perform rating with a $210 target, focusing on Reddit’s advertising potential and opportunities to expand its ad surfaces.
BofA Securities raised its target to $180, pointing to strong execution and a 50% increase in advertiser adoption on the platform.
Jefferies raised its price target on Reddit to $300 on Wednesday, up from $230, citing confidence in the platform’s ability to capture a greater share of US digital advertising.
The firm projects Reddit could expand its ad market share by roughly 65 basis points over the next four years, in line with peers Snap (NYSE: SNAP) and Pinterest (NYSE: PINS).
Analysts highlighted Reddit’s extensive library of user-generated, contextual content as a key asset for third-party generative AI models.
They also pointed to the potential for significant increases in data licensing revenue when contracts come up for renewal in the first half of 2027.
The new price target implies an upside of about 25%.
Future prospects and market sentiment
The record-high stock price illustrates investors’ optimism about Reddit’s evolving role in digital advertising and social engagement.
The company’s nearly 70% revenue growth over the past year, coupled with stable and rising user metrics, has strengthened the perception that it can compete effectively against larger rivals in the social media space.
At the same time, analysts’ upward revisions signal that Wall Street sees room for further growth, even after the stock’s dramatic rally.
With expanded advertiser adoption and a growing user base, Reddit is increasingly viewed as a platform with long-term potential in the broader digital economy.
While the company still faces competition and the challenges of scaling advertising effectively, its current momentum has set a positive tone among investors.
For now, Reddit’s strong execution and accelerating growth trajectory are driving its shares to new heights, cementing its position as one of the standout performers in the social media sector.
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