Meta Stock vs Reddit Stock: META $774 Billion Giant vs RDDT $264 Growth Challenger

NASDAQ:META vs NASDAQ:RDDT – Scale, Profitability, and AI Growth Paths Compared

Meta Platforms (NASDAQ:META) and Reddit (NASDAQ:RDDT) represent two sides of today’s digital engagement economy. One is a $2 trillion behemoth with unmatched global scale and efficiency, the other a $49.5 billion upstart with explosive growth but thin profitability. At $774.70 per share, Meta commands a $1.96 trillion market cap, while Reddit trades at $264.57, brushing against all-time highs near $268. Both are deeply tied to advertising and AI monetization, but the risk-reward structures diverge sharply.

Revenue Growth Momentum – Stable at Meta, Accelerating at Reddit

Meta delivered $47.5 billion in Q2 2025 revenue, rising 22% year-over-year, while net income soared 38% to $18.3 billion. For the trailing twelve months, Meta generated $178.8 billion in revenue with $71.5 billion net profit, translating to a remarkable 40% profit margin. Analysts expect Q3 revenue between $47.5–$50.5 billion, sustaining mid-20% growth.

Reddit’s numbers, though smaller in scale, are even more striking in percentage terms. Q2 revenue hit $243 million, up 77.9% YoY, driven by stronger ad monetization and AI licensing partnerships. The platform now boasts 110 million daily active users (DAUs), with rising revenue per user. Unlike Meta, Reddit remains unprofitable, with losses narrowing but still material, and much of the bullish thesis rests on scaling its ecosystem fast enough to justify a forward valuation multiple above 90x earnings.

Profitability Gap – Meta’s Cash Machine vs Reddit’s Burn Rate

Meta operates with 43% operating margin, extraordinary for a company of its size. EPS stands at $27.58, while quarterly free cash flow reached $9 billion even as CapEx ballooned to $16.5 billion. Over the first half of 2025, free cash flow was $20.1 billion, sufficient to finance buybacks and dividends.

Reddit, in contrast, is still navigating losses. Despite its fast-growing topline, the company has yet to prove sustainable profitability, and insiders have already sold $68.8 million worth of stock, signaling some caution from early backers. Reddit’s valuation rests heavily on execution risk, while Meta’s rests on efficiency and resilience.

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Advertising Engines – AI-Enhanced Scale vs Early-Stage Optimization

Advertising remains the lifeblood of both companies, but Meta’s machine dwarfs Reddit’s. Across Facebook, Instagram, WhatsApp, and Messenger, Meta reaches more than 3 billion daily users. In Q2, Meta grew ad impressions 11% and raised price per ad 9%, with AI tools boosting advertisers’ return on ad spend by 22%. This combination of scale and efficiency cements Meta’s dominance in digital ads.

Reddit is in earlier innings. Its unique community-driven model makes targeting complex, but recent upgrades in contextual ads and AI licensing deals are improving monetization. The company’s potential lies in harnessing its active communities for advertisers while differentiating from rivals like TikTok and YouTube. While Reddit cannot yet match Meta’s efficiency, it has proven it can grow revenue faster on a percentage basis, which justifies its premium multiple—at least in the short run.

Capital Expenditure and Strategic Bets – Meta’s $70B AI Push vs Reddit’s Lean Expansion

Meta is spending heavily—$66–72 billion in CapEx for 2025—largely directed at AI infrastructure and GPU data centers. These investments support both ad delivery and next-gen hardware. Reality Labs, however, remains a heavy drag, losing $4.8 billion in Q2 and over $70 billion since 2020. Yet Meta’s device momentum is real: Ray-Ban Meta smartglasses tripled sales YoY, and production could reach 10 million annual units by 2026. The upcoming Meta Connect 2025 conference will showcase new AR glasses and wristband controllers, cementing Zuckerberg’s push into hardware.

Reddit’s strategy is more capital-light. Its focus lies in ad platform development, subscriptions, and data licensing. Instead of massive infrastructure bets, Reddit leans on partnerships to drive incremental monetization. This minimizes risk but also caps the scale of upside relative to Meta’s ecosystem control ambitions.

Shareholder Returns – META as a Cash Return Engine, RDDT Still in Build Mode

Meta balances growth with shareholder rewards. The company returned $22.9 billion in buybacks in H1 2025, including $10.2 billion in Q2 alone, alongside a $0.525 dividend per share (yield 0.27%). With $47.07 billion cash and manageable debt, Meta can sustain both heavy investment and payouts.

Reddit has no dividend, no buyback program, and remains dependent on external capital to fund growth. Shareholders must rely on capital appreciation tied to future monetization success. This reflects the early-stage nature of the business versus Meta’s mature cash-generation model.

Valuation and Analyst Targets – Discounted Giant vs Expensive Growth Bet

Meta trades at a forward P/E of 26.4, well below Apple and Microsoft (both near 32x), despite analysts raising earnings forecasts 41 times in the past 90 days. EPS is projected at $28.10 in 2025 and $29.97 in 2026, implying upside toward analyst targets of $900–$1,086.

Reddit trades at a stretched 93x forward P/E, reflecting extreme optimism. While revenue growth is stellar, the valuation assumes seamless execution and rapid scaling of profitability. Analyst consensus pegs fair value near $300, leaving room for upside, but the risk profile is far higher than Meta’s.

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Technical Positioning – Stability at META, Breakout Risk at RDDT

Meta trades inside a bullish channel, supported at $736–$751 with resistance near $780–$790. A breakout could target $820, with medium-term potential toward $900. Liquidity and institutional positioning make its technical picture stable.

Reddit, by contrast, is volatile but strong. Shares hover just below resistance at $270–$275, with breakout potential toward $300. Support lies near $240, making risk-reward attractive for traders but volatile for long-term holders.

Strategic Verdict – META as Core Holding, RDDT as Speculative Growth

The data is decisive. NASDAQ:META is a mature, cash-rich, highly profitable leader trading at a valuation discount to peers while offering growth, buybacks, and dividends. It remains a Buy for investors seeking stability and AI-driven compounding. NASDAQ:RDDT is a high-beta growth stock—attractive for aggressive portfolios betting on community monetization and AI licensing but carrying significant downside if execution slips. For disciplined investors, META anchors the portfolio; Reddit is an optional satellite play with lottery-ticket upside.

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