Reddit, Inc. (NYSE:RDDT) Faces Legal Scrutiny Amid Stock Volatility

Reddit (NYSE:RDDT) shares rallied 17% on Friday after the social media platform reported second-quarter results that topped forecasts and issued a strong revenue outlook for the third quarter.

The company posted earnings of $0.45 per share, crushing analyst expectations of $0.19. Revenue soared 78% year-over-year to $500 million, well ahead of the $426 million forecast.

Advertising remained Reddit’s primary revenue driver, increasing 84% to $465 million and accounting for over 93% of total sales. Revenue from data licensing and other streams rose 24% to $35 million, supported by AI-training partnerships.

Daily Active Uniques (DAUq) reached 110.4 million, up 21% year-over-year and slightly above the prior quarter’s 108.1 million. Gross margin expanded to 90.8%, while adjusted EBITDA climbed to $167 million, with margin rising to 33% from 14%.

“Reddit is built for this moment,” said CEO Steve Huffman, emphasizing a focus on global scaling, sustainability, and platform trust.

Reddit projected third-quarter revenue between $535 million and $545 million, well above the $473.1 million consensus, lifting investor sentiment.

• Eric Sheridan from Goldman Sachs has set a new price target of $212 for Reddit (NYSE:RDDT), indicating a potential upside of about 32%.
• Reddit's stock has shown significant volatility, with a yearly high of $230.41 and a low of $49.13.
• The company faces challenges in advertising growth and user engagement amidst the evolving AI-driven search technologies.

On August 1, 2025, Eric Sheridan from Goldman Sachs set a price target of $212 for Reddit (NYSE:RDDT). At the time, the stock was trading at $160.59, suggesting a potential upside of about 32%. Reddit, a popular social media platform, is known for its user-generated content and community-driven discussions. It competes with other tech giants like Amazon and Coinbase, which are also navigating significant industry changes.

Reddit's current stock price of $160.59 reflects a 7.54% increase, or $11.26, from previous levels. The stock has seen fluctuations today, with a low of $154.83 and a high of $162.86. Over the past year, RDDT has experienced a high of $230.41 and a low of $49.13, indicating significant volatility. The company's market capitalization is approximately $29.63 billion, highlighting its substantial presence in the market.

Reddit faces challenges in advertising growth and user engagement, as highlighted by the evolving landscape of AI-driven search technologies. These factors could impact its future performance and stock valuation. Despite these challenges, the stock's recent increase and trading volume of 16,087,701 shares suggest continued investor interest.

In the broader tech industry, cloud providers are fiercely competing for market share. Microsoft's Azure business, for instance, is experiencing a notable surge. Meanwhile, in the cryptocurrency sector, equities and ETFs are introducing new trading dynamics. These industry changes could influence Reddit's strategic decisions and market positioning in the coming months.

• Goldman Sachs updated its rating for Reddit (NYSE:RDDT) to Neutral, suggesting a hold position on the stock.
• The stock price of Reddit is currently $160.59, reflecting a 7.54% increase and showcasing investor confidence despite challenges in advertising growth and user engagement.
• Reddit's market capitalization stands at approximately $29.63 billion, with a trading volume of 16,087,701 shares, indicating significant investor interest amidst the evolving social media landscape.

On August 1, 2025, Goldman Sachs updated its rating for Reddit (NYSE:RDDT) to Neutral, maintaining its previous grade. The recommendation is to hold the stock. At the time of this announcement, the stock price was $160.59. Reddit, a popular social media platform, is known for its user-generated content and community-driven discussions. It competes with other social media giants like Facebook and Twitter.

Reddit is currently facing challenges related to advertising growth and user engagement. The stock for RDDT is priced at $160.59, reflecting an increase of 7.54% with a change of $11.26. This suggests that despite the challenges, investors still see potential in the company's ability to navigate these issues. The stock has fluctuated between a low of $154.83 and a high of $162.86 today.

The company has a market capitalization of approximately $29.63 billion, indicating its significant presence in the social media industry. Over the past year, RDDT has reached a high of $230.41 and a low of $49.13, showing considerable volatility. This volatility may be attributed to the evolving landscape of social media and the impact of AI-driven search technologies.

Today's trading volume for RDDT stands at 16,087,701 shares, highlighting active investor interest. As the industry undergoes significant changes, with competitors like Amazon and Coinbase also releasing earnings, Reddit's ability to adapt will be crucial. The cloud sector, for instance, is seeing providers like Microsoft's Azure business experience a notable surge, which could influence Reddit's strategies moving forward.

• Morgan Stanley maintains an "Overweight" rating for NYSE:RDDT, raising its price target from $154 to $170.
• Reddit faces a securities class action lawsuit for investors who bought securities between October 29, 2024, and May 20, 2025.
• The stock price of RDDT shows a 4.01% increase, with a current price of $148.24, indicating active investor interest and market volatility.

Reddit, Inc. (NYSE:RDDT) is a social media platform known for its diverse user-generated content and community-driven discussions. It competes with other social media giants like Facebook and Twitter. On July 20, 2025, Morgan Stanley maintained its "Overweight" rating for RDDT, indicating confidence in the stock's potential. The stock price at the time was $148.24.

Morgan Stanley also raised its price target for Reddit from $154 to $170, as highlighted by TheFly. This suggests that the firm expects the stock to perform well in the future. Despite this positive outlook, Reddit is currently involved in a securities class action lawsuit. Rosen Law Firm is urging investors who bought Reddit securities between October 29, 2024, and May 20, 2025, to seek legal counsel before August 18, 2025.

The stock price of RDDT is currently $148.24, showing a 4.01% increase or $5.72. Today, the stock has fluctuated between $138.11 and $149.09. Over the past year, RDDT has seen a high of $230.41 and a low of $49.13. This volatility reflects the dynamic nature of the stock market and investor sentiment.

Reddit's market capitalization is approximately $27.35 billion, indicating its significant presence in the social media industry. The trading volume for RDDT today is 5,988,612 shares, showing active investor interest. Despite the ongoing legal issues, the stock's performance and Morgan Stanley's positive outlook suggest potential growth for Reddit.

Wells Fargo downgraded Reddit (NYSE:RDDT) from Overweight to Equal Weight and lowered its price target to $115 from $168, pointing to structural user engagement challenges and a less favorable advertising outlook. The company’s shares fell more than 4% intra-day today.

The bank flagged growing concerns that recent disruptions in user activity—particularly among logged-out users—are likely to be more permanent than previously expected. With Google accelerating AI integration in search, Reddit could see a meaningful decline in logged-out traffic, which currently accounts for 55% of its user base.

Although logged-out users contribute just 15% of ad revenue due to lower engagement and ad load, they serve as a critical funnel for acquiring logged-in users. As a result, Wells Fargo cut its three-year logged-in DAU growth forecast to 10% CAGR from 13%.

The downgrade also reflects concerns about Reddit’s ability to meet long-term advertising expectations, especially when compared to market giants like Meta. The firm now expects Reddit’s ad revenue and EBITDA in 2026 and 2027 to come in 6% and 14% below consensus, respectively.

Additionally, Reddit’s decision to prioritize community health over monetization may limit the upside of high-margin data licensing revenue.

Reddit (NYSE:RDDT) shares surged over 6% in pre-market today after the company posted first-quarter earnings and revenue that far exceeded analyst expectations, boosted by accelerating ad sales and strong user growth. The upbeat results, along with optimistic guidance, signaled early success from Reddit’s recent investments in advertising infrastructure and AI capabilities.

The company reported adjusted earnings of $0.13 per share, easily topping the $0.01 consensus estimate. Revenue came in at $392.4 million, representing a 61% year-over-year surge and beating forecasts of $369.3 million.

Advertising, Reddit’s primary revenue driver, matched overall growth with $358.6 million in sales. Daily active uniques (DAUq)—a key measure of engagement—rose 31% to 108.1 million, reflecting the platform’s growing traction among users seeking community-driven content.

Reddit also swung to profitability, reporting net income of $26.2 million compared to a loss of $575.1 million in the same quarter last year.

Looking ahead, the company expects second-quarter revenue between $410 million and $430 million, comfortably above the $392.9 million Wall Street projection. Adjusted EBITDA is forecasted between $110 million and $130 million, signaling continued confidence in ad monetization momentum.