What Happened?
Shares of online community and discussion platform Reddit (NYSE: RDDT) jumped 2.9% in the afternoon session after analysts at RBC Capital Markets raised their price target on the stock.
The firm increased its price expectation to $250 from a previous $245. While raising the target, RBC kept its 'Sector Perform' rating on the shares. This rating suggests the analyst expected the stock to perform in line with its industry peers. The upward revision of the price target, however, indicated a more positive outlook on the stock's value, which likely contributed to investor optimism during the trading session.
After the initial pop the shares cooled down to $231.75, up 3.5% from previous close.
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What Is The Market Telling Us
Reddit’s shares are extremely volatile and have had 60 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 12 days ago when the stock gained 3% on the news that investors continued to focus on the company's strong user growth and its valuable position in the artificial intelligence data market.
This move came as the company's stock had already surged significantly over the previous six months. The positive sentiment was tied to Reddit's transformation into a key source of human-generated data for training AI models. The company secured data-sharing deals with Alphabet's Google and OpenAI, which integrated Reddit's content into their platforms. This strategy to monetize its vast collection of authentic human conversations complemented its strong core advertising business. The advertising segment benefited from rising user engagement, with the company reporting in the third quarter of 2025 that both its daily and weekly active users increased 20% year over year.
Reddit is up 39.7% since the beginning of the year, but at $231.75 per share, it is still trading 14.4% below its 52-week high of $270.71 from September 2025. Investors who bought $1,000 worth of Reddit’s shares at the IPO in March 2024 would now be looking at an investment worth $4,594.
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