Reddit Stock Price Holds $264 as RDDT Nears Record $268 and Eyes $300

NASDAQ:RDDT Extends Gains as Revenue Growth Surges and AI Licensing Expands

Reddit, Inc. (RDDT) traded at $264.22, down 0.91% intraday, yet remains near its 52-week high of $268.15 after an extraordinary run that saw the stock climb more than 327% year-over-year and 62% year-to-date. The company’s market cap now stands at $49.47 billion, a staggering leap from just $11.5 billion in mid-2024, showing how quickly sentiment has turned after years of losses.

Financial Momentum: Quarterly Revenue Hits $499.63M with Strong Margins

In Q2 2025, NASDAQ:RDDT delivered revenue of $499.63 million, up 77.9% year-on-year, crushing analyst expectations of $424 million. Net income hit $89.3 million, with EPS at $0.45, well above the $0.20 estimate. The company’s trailing twelve-month revenue now totals $1.67 billion, with a net profit margin of 12.97% and operating margin at 13.55%. Levered free cash flow reached $290.6 million, supported by $2.06 billion in cash against only $25 million in debt, giving the balance sheet exceptional flexibility. With a forward P/E of 93.46 and price-to-sales of 28.56, the valuation reflects enormous growth expectations, but also exposes investors to premium pricing risk.

User Base Expansion: DAUs Surge to 110.4M, Communities Double

Reddit’s core growth driver remains its expanding user base. Daily Active Users climbed 21% YoY to 110.4 million, while thriving communities doubled year-on-year. On-platform search queries grew 10% sequentially to 50 million per day thanks to machine translation in 13 languages and new AI tools such as Reddit Answers. Domestic daily visitors rose 33.7% annually to 50.3 million, making Reddit one of the fastest-scaling social networks globally. Such engagement strength underpins ad revenue acceleration and provides leverage for licensing partnerships with major AI firms.

Advertising and Licensing: Ad Revenue 84% Higher, AI Deals in Focus

Advertising continues to dominate revenue, reaching $465 million in Q2, up 84% YoY and representing 91% of total revenue. Licensing revenue, primarily from AI training deals, surged 66% YoY to $33.7 million, now contributing 9% of sales. The original $60 million Google licensing agreement has evolved into discussions for a deeper AI content-sharing partnership that could unlock significant recurring revenue. With Oppenheimer modeling RDDT at 28–35x 2027 EBITDA including AI licensing upside, Wall Street sees data monetization as the long-term growth pillar.

Institutional Moves and Insider Transactions Shape Market Sentiment

Institutional investors continue to increase exposure. New England Research & Management acquired 1,450 shares valued at $218,000 in Q2. Meanwhile, insider transactions show both monetization and confidence. CFO Andrew Vollero sold 30,000 shares worth $6.54 million, reducing his stake by nearly 10% but still holding 284,168 shares valued at about $62 million. CTO Christopher Brian Slowe sold 14,000 shares for $3.3 million, retaining a 210,534-share stake worth nearly $50 million. In the last 90 days, insiders have sold 342,126 shares totaling $68.8 million. Full insider details are available here. Insiders still hold 34.25% of the company, while institutions control 88.3%, reflecting high conviction from large investors despite valuation risks.

Analyst Coverage and Price Targets: RDDT Valued Between $210 and $300

Wall Street remains split but optimistic. Jefferies and Needham both raised price targets to $300, citing generative AI licensing and ad strength. Oppenheimer lifted its target from $215 to $300, while Morgan Stanley boosted to $230, crediting stronger-than-expected DAU metrics. RBC Capital is more cautious with a $210 target and a “Sector Perform” rating. The current average target is $210.77, below the market price of $264, suggesting the stock is running ahead of consensus, though the high target ceiling of $300 implies another 14% upside if execution continues.

Valuation Metrics: Premium Pricing but Strong Growth Outlook

At 119x trailing earnings and 93x forward earnings, NASDAQ:RDDT trades at valuations more extreme than Meta (NASDAQ:META) at 27x or Alphabet (NASDAQ:GOOGL) at 25x. Price-to-book is 20.91, well above industry averages. Enterprise value-to-EBITDA sits at 324.85, a clear signal that investors are pricing in sustained triple-digit growth rates. With expected revenue of $2.08 billion in 2025 (+59.9% YoY) and $2.8 billion in 2026 (+34.6% YoY), Reddit must deliver flawlessly to justify these multiples. EPS forecasts stand at $1.88 in 2025 and $3.21 in 2026, representing 63.5% growth this year and 32% growth next year.

Competitive Positioning: Authenticity as a Defense Against AI Slop

Reddit’s strength lies in authenticity. While platforms like Pinterest (NYSE:PINS) battle AI-generated “slop” that threatens content quality, Reddit’s community-driven moderation and upvote system naturally filter low-quality synthetic posts. This makes RDDT data more valuable for AI training, reinforcing licensing demand from Anthropic, Google, and other large language model developers. Unlike polished feeds of competitors, Reddit’s chaotic but authentic conversations have become its moat, ensuring resilience in the AI era.

Strategic Partnerships with Sports and Google Expand Monetization

Partnerships with the NBA, NFL, MLB, PGA Tour, and NASCAR are enhancing engagement through exclusive highlights and interactive content, lifting ad revenues. The deepening Google AI collaboration signals Reddit’s ability to monetize not only ads but also its unique dataset. These deals highlight how RDDT is becoming a dual-revenue engine: advertising scale plus AI licensing.

Verdict on NASDAQ:RDDT – Buy, Sell, or Hold

With shares trading near $264 against a one-year low of $61.54, NASDAQ:RDDT has created one of the most dramatic rallies in social media history. The fundamentals—77.9% revenue growth, expanding DAUs, positive EPS inflection, and strong institutional ownership—justify premium valuations. Risks stem from insider selling, extremely high multiples, and dependence on ad growth, but AI licensing and authentic user engagement provide durable tailwinds.

On balance, RDDT is a Buy, with short-term volatility likely but medium-term upside to $300 if execution continues and the Google AI deal closes. Investors must accept that at current levels, Reddit is priced for near-perfection, but with authenticity as its moat and monetization channels expanding, the stock maintains momentum as one of the most compelling growth stories in 2025.

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