What Happened?
Shares of online community and discussion platform Reddit (NYSE: RDDT) jumped 2.9% in the afternoon session after DA Davidson initiated coverage on the company with a buy rating and a $200 price target, signaling confidence in its future growth.
The analyst noted that Reddit is currently under-monetized compared to its peers and is well-positioned as a 'human-first' social platform, which should continue to draw in more users and advertisers.
After the initial pop the shares cooled down to $161.24, up 1.7% from previous close.
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What Is The Market Telling Us
Reddit’s shares are extremely volatile and have had 54 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 7 days ago when the stock gained 3% on the news that sentiment improved following significant moves from heavyweights like Meta Platforms, which extended its partnership with Broadcom to deploy custom AI chips.
Additionally, reports of Amazon's plans to acquire Globalstar to boost its satellite business provided a strong bullish signal for the industry's continued expansion. Internet companies benefit from the massive, ongoing scale-up of AI-driven infrastructure, which enhances their ability to monetize user data and optimize advertising platforms. In a "risk-on" market, these growth stocks attract capital as investors prioritize companies with deep technological moats and the ability to scale globally through digital ecosystems.
Reddit is down 33.3% since the beginning of the year, and at $161.24 per share, it is trading 40.4% 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 $3,197.
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