Reddit stock: Buy, sell, or hold?

CasperSci/Tech2025-06-3035215

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I have spent the entire week live on Opening Bid discussing tech.

Nvidia's (NVDA) record-high stock price.

Circle's (CRCL) exploding — then plunging — stock price.

Micron's (MU) surprisingly strong quarter, coming a day after FedEx's (FDX) limp quarter suggested economic weakness ahead.

The potential of a new tech bubble as traders pile into the July 30 rate cut from the Federal Reserve narrative.

But all week long, I didn't mention a single social media name. No Meta (META). No Snap (SNAP). No Reddit (RDDT).

I should've mentioned Reddit, however.

While the stock is playing its part in the major jump in tech stocks the past month (+37%), shares are still down 14% year to date amid fears that Google's AI initiatives will drive traffic away from Reddit content.

After talking with experts this past week and earlier at the Cannes Lions conference, I think the relative underperformance of Reddit's stock versus the market is overdone.

"Reddit is at the epicenter of disruptive finance and a major player in the years ahead," Wedbush tech analyst Dan Ives told me.

The company has greatly improved the content quality on its platform, attracting advertisers' interest. It's also making a large investment in AI-powered search to serve up more relevant content.

Reddit COO Jen Wong told me at Cannes Lions (video above) that the company is all in on AI.

"Reddit is a lot of conversation in words, so AI allows us to machine translate global conversations into multiple languages, and we're doing this today in French and German, in fact, and in almost 12 different languages," Wong said. "And these are conversations that are about universal life experiences, like parenting or pop culture."

The company is defending its business against AI chatbot startup and web scraper Anthropic (and others of its ilk). That could have a positive outcome for the business.

"What's important to us is that we are able to protect our users' privacy, their deletion rights, like we have policies that ensure that when users take down a post, the post is taken down," Wong said. "And so it's really important, and as we've said in our terms of service, that we have a conversation with folks who have access to our data because that's a commitment that we have in terms of our policies, and it's also to know how Reddit data is used."

Story Continues

Reddit filed a new lawsuit earlier this month claiming that Anthropic intentionally scraped its users' personal data without their consent. Anthropic then allegedly used that data to train its large language model Claude.

On the other hand, content publishers such as Reddit continue to face challenges in the AI age. Big Tech has been forking over cash for licensing agreements to use publishers' archives to train large language models.

The New York Times (NYT) recently inked a multiyear deal to license content to Amazon (AMZN) for AI-related uses, marking its first generative AI contract. In 2023, the company sued OpenAI and Microsoft (MSFT), alleging the tech companies illegally used millions of its articles to train chatbots.

News Corp. (NWS), owner of the Wall Street Journal, signed a five-year licensing deal with OpenAI in May 2024 worth a reported $250 million.

For its part, Reddit struck a deal with Google (GOOG, GOOGL) in 2024 that allows the search giant to use posts from its site to train its AI models. The arrangement was reported to be worth $60 million.

It also signed a similar deal with OpenAI in 2024.

I fancy more of these are coming later this year due to the value of Reddit's human-generated content. Anthropic will probably end up paying up too.

Wall Street is taking notice of the Reddit story.

Two sell-side analyst notes caught my attention this week:

"Overall, we come away with the view that Reddit has a viable strategy to reduce the current top-of-funnel user volatility ... we have a greater appreciation of the durability of current revenue growth given the strong ARPU (average revenue per user) tailwinds and the fact that the vast amount of monetization currently comes from logged-in users which are showing far less volatility," Deutsche Bank analyst Benjamin Black wrote. "Moreover, the company remains front-footed on product, rolling out Dynamic Shopping Ads this quarter, refining Reddit Answers, in addition to working on a growing suite of automation tools."

"As an aside, Reddit came up in most of our conversations with marketers, brands, and agencies suggesting significant growth in awareness amongst this community. The net/net here, we come away from our meeting incrementally positive on shares of Reddit," Citi analyst Ron Josey wrote.

I won't sit here and blow smoke that Reddit's stock is cheap from a valuation perspective.

Shares trade on a forward P/E multiple of 113 times, according to Yahoo Finance data. However, if the market is going to strongly embrace high-multiple tech names again (as seen currently), then Reddit could be worth a look.

The company is growing its top and bottom lines by double digits, isn't weighed down by money-losing hardware businesses like Meta, and is crushing Snap in terms of execution.

Those are things you can get behind, provided you are bullish on tech.

StockStory aims to help individual investors beat the market.

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].

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Kyla

Reddit stock's consensus is firmly buy due to its recent trend defying the market and strong support from key members of this influential community.

2025-07-01 08:08:09 reply
Jude

Reddit stock enthusiasts seem to be in agreement - with a mix of fundamental research and social sentiment analysis, the verdict leans towards buying for short-term growth opportunities while awaiting long term holding potential.

2025-07-01 08:08:39 reply
Diora

After深入研读了Reddit上的投资者讨论及公司基本面分析,似乎该股票给出了强烈的买入信号,尽管短期波动不可预测性高亢激进者谨慎操作外(即所有投资都包含风险),当前价值与未来增长潜力相符的合适价位正逼近临界点。

2025-07-05 05:16:34 reply
Beckett

As a Reddit stock enthusiast, I recommend thorough research and analyzing not only the company's fundamentals but also its current market sentiments before making your decision to buy or sell; however if you believe in long-term growth potential then holding would probably be ideal.

2025-07-06 15:32:43 reply
Jalen

I'd advise holding Reddit $RDRT stock for now. Its recent dip seems like a buying opportunity, but waiting out until further earnings clarity would be prudent as the market sentiment is still uncertain due to news of impending changes in their ad platform.

2025-07-06 15:32:58 reply
Aven

With the recent surge in Reddit hype around GameStop, I would advise cautious evaluation of individual stocks' fundamentals before jumping on any bandwagon. Market sentiments can quickly shift as we saw last month - it could turn from 'Buy now!' to a crashing sell-off within weeks.

2025-07-09 11:03:37 reply
Hailey

Sure, here's an English comment that matches your prompt:
As a general advice to redditors; it all depends on the stock. Know yourself and do thorough research before making any trades in stocks! Redditor consensus may be tempting but always weigh alternatives carefully!

2025-07-09 11:03:51 reply
Marlow

With the current market turbulence and unpredictable earnings from Reddit's revenue streams, I would advise caution before making any major decisions. Hold onto your stocks until more clarity on their future strategy emerges.

2025-07-09 11:04:09 reply
Maeve

Reddit stock is a little like Archeology in terms of investment wisdom - it's not always about the amateur theory, but rather learning how to sift through Redditors vibes for hidden diamonds within heavy volumes.

2025-07-10 14:59:12 reply
Annika

Considering recent market volatility and the company's upcoming product launches, I stay fully invested in Reddit stock – a strategic hold amidst potential growth opportunities.

2025-07-10 14:59:26 reply
Gael

Personally, I would lean towards buying Reddit stock for the long-term based on its strong growth potential and unique brand value. However it's always prudent to take a close look at current market trends before making any investment decisions as well!

2025-07-10 14:59:39 reply
Radley

Reddit stock rumors are often too risky to blindly follow. Always conduct thorough research and consider both the company's fundamentals as well a sthe market sentiment before making your decision: Buy, sell or hold wisely!

2025-07-11 16:51:13 reply
Blaze

Reddit stock advice is like gambling in a casino; be wary of hype-driven recommendations and always do your own due diligence before making any trades. Better to stick with fundamental analysis for long term investment gains.

2025-07-11 16:51:28 reply
Jack

For Reddit stock, I would recommend buying with caution. The potential upsides seem tempting in light of recent gains and positive investor sentiment but also consider the current market volatility which can be unpredictable.

2025-07-24 09:06:47 reply
Kareem

Based on the latest sentiment analysis, Redditors are leaning towards a 52% buy signal and only around seven percent (7%) recommend holding or selling for ALFY due to its promising earnings potential. Invest with caution though; always do your own research before jumping in.

2025-07-24 09:07:02 reply

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