Reddit's Stock Soars as New AI-Powered Advertising Tools Spark Investor Interest

Reddit Inc stock soars 15%: Is it time to buy into the hype? What is the reason behind the jump?

Shares of Reddit Inc. (traded as RDDT) witnessed a sharp upswing early Tuesday, surging over 15% shortly after the market opened. The dramatic rise has triggered intense interest among retail and institutional investors, prompting renewed discussions around the stock's long-term potential and its underlying fundamentals. With Reddit's current stock price at $145.48, up $19.29 from its previous close, market observers are evaluating whether this momentum signals a durable breakout or a short-lived speculative bounce, as mentioned in a report by Bloomberg. According to trading data as of 9:41 a.m. GMT-4, Reddit Inc. opened at $134.00, significantly higher than its prior close of $126.19, and climbed rapidly to hover near the intraday high of $145.69. The price movement reflects intense early-session buying, driven largely by positive sentiment surrounding Reddit's technological and advertising developments. For traders relying on short-term price action, the steep climb has become a focal point for potential entry, although analysts caution against overlooking the risks posed by the stock's extreme volatility. The bullish movement has reignited debate about Reddit's sky-high P/E ratio of 233.35, which many analysts interpret as a reflection of elevated growth expectations. While high multiples are common for tech-driven platforms, such valuation levels also amplify downside risks in case of earnings misses or changing market sentiment. Reddit's 52-week trading range -- from $49.13 to $230.41 -- further underlines its volatility. Currently trading in the upper half of this band, the RDDT stock remains well below its historic peak, signaling both room for further growth and the potential for pullbacks. True to its growth-stage character, Reddit offers no dividend yield, choosing instead to reinvest in innovation and expansion. The company recently unveiled a set of AI-powered advertising tools -- a move that many see as central to its future revenue model. Announced at the Cannes Lions Festival, these tools include Reddit Insights, a real-time community listening platform for marketers, and Conversation Summary Add-ons, which allow brands to attach positive Reddit discussions under their ads. Powered by the company's proprietary Reddit Community Intelligence engine, these tools are designed to help brands better understand and engage with Reddit's highly interactive user base. "Reddit is positioning itself as a serious player in the AI marketing space," the company stated in its announcement. Early testing partners include Publicis, Lucid, and Jackbox Games. From a technical standpoint, Reddit's explosive price action may present opportunities for aggressive day traders looking to ride the wave. However, the elevated valuation, lack of dividends, and wide price swings make it a precarious choice for long-term investors, as per a report by CNBC. Bullish arguments centre around Reddit's innovation in AI advertising, its massive online community, and recent revenue growth. Bearish views, however, highlight concerns over overvaluation, excessive volatility, and the risk of buying after a sharp rally. Reddit's recent price jump -- fuelled by optimism around its AI initiatives and digital advertising push -- offers a compelling case for investors who can stomach risk and are chasing high returns. However, caution is warranted. With rddt stock trading at lofty valuations and exhibiting unpredictable movements, prudent investors may prefer to wait for consolidation or clearer earnings trajectories before entering. Reddit shares surged more than 15% due to strong early-session buying interest, sparked by optimism around its AI-powered advertising tools and positive investor sentiment. The stock opened at $134.00 and quickly climbed to an intraday high of $145.69. As of the latest trading data, Reddit is priced at $145.48, reflecting a gain of $19.29 from the previous close. It carries a high P/E ratio of 233.35, suggesting elevated investor expectations for future growth.

Reddit Shares Are Rising Tuesday: What's Going On? - Reddit (NYSE:RDDT)

Reddit Inc. RDDT shares are trading higher Tuesday, continuing momentum from Monday when the company announced two new AI-driven advertising tools aimed at enhancing its platform's appeal to brands. The rally also appears to be supported by recent institutional developments and broader optimism around Reddit's data strategy. What To Know: On Monday, Reddit introduced "Reddit Insights" and "Conversation Summary Add-ons," two features designed to help advertisers better understand and participate in Reddit's unique community-based environment. Reddit Insights provides real-time analysis of user discussions and trending topics, enabling brands to tailor campaigns more effectively. The Conversation Summary Add-ons allow selected user comments to appear under promoted posts, giving brands a curated and presumably supportive context around their ads. The announcement comes amid tightened ad budgets across the industry, with agencies like WPP Media recently lowering their global ad revenue forecasts. As advertisers demand clearer ROI in uncertain conditions, Reddit's focus on AI tools could be seen as an attempt to offer more data-driven value to potential buyers. Reddit is also gaining increased exposure in Google's AI-generated search summaries, now reportedly the second most cited source behind Quora, according to Semrush. This stems in part from Reddit's $60 million licensing deal with Google last year. However, that visibility comes with a trade-off as many users now access Reddit content without clicking through to the platform or logging in, limiting Reddit's ability to monetize through ads. CEO Steve Huffman acknowledged during the company's May earnings call that deeper integration with Google's AI tools could negatively affect site traffic, even as Reddit projected stronger-than-expected second-quarter revenue. Reddit shares may also be seeing some additional momentum as the company is set to join the widely held Russell indexes at the end of the month, a move that could drive increased demand from index-tracking funds. Reddit will be added to the Russell 3000 index at the close of business June 27. In addition, Reddit will also be automatically added to either the Russell 2000 or Russell 1000 index. RDDT Price Action: Reddit shares were up 5.11% at $132.55 at the time of publication Tuesday, according to Benzinga Pro. Read Next: Wall Street Drops As Trump Weighs Iran Action, Defense Stocks Jump: What's Driving Markets Tuesday? Image via Shutterstock. RDDTReddit Inc$133.725.96%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum90.34GrowthNot AvailableQualityNot AvailableValue5.15Price TrendShortMediumLongOverview This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Why Reddit Stock Is Jumping Today | The Motley Fool

Reddit (RDDT 5.68%) stock is gaining ground today after the company unveiled new artificial intelligence (AI) tools. The social media specialist's share price was up 6.8% as of 2:30 p.m. ET. Reddit published a blog post yesterday detailing its new Community Intelligence offering and two services that will be included through the platform. The market is having a positive reaction to the new software suite and bidding up the stock in response. The Community Intelligence platform's Reddit Insights service provides marketers with real-time information about trends and discussions that are occurring on the social media platform. By turning posts and comments on the platform into structured and easily digestible data, marketers should have an easier time forming and adjusting their advertising campaigns. Meanwhile, the Conversation Summary add-on service allows marketers to showcase relevant positive comments below their advertisements. With the tool, marketers may be able to deliver greater authenticity or positive reinforcement for their ads. Reddit has been making moves to increase AI integration across its platform and provide advertisers with tools and data that can help them increase the reach and efficiency of ads posted on its online-community platform. Reddit boasts a large and engaged user base, but the platform has historically monetized at relatively low levels compared to other leading social platforms. By licensing data from its platform for the training of large language models and using AI to bolster the value of advertising on its platform, Reddit has been taking some commendable steps to broaden and strengthen its monetization channels. Trading at roughly 41 times this year's expected earnings, the social media specialist has a growth-dependent valuation that creates the potential for volatility -- but the business has been making some smart moves lately.