Reddit Stock Soars as Ad Strength Fuels Revenue Forecast Beat
Reddit, Inc. (NYSE: RDDT) shares advanced big today on projected stronger second-quarter revenue than analysts expected at the social media leader. The company’s stock jumped 7% in extended trading, with after-hours gains reaching as much as 20%, after executives offered bullish guidance fueled by surging demand from digital advertising. Here’s Reddit IPO struck, Reddit stock to buy now Intrigued investors have become fixated with RDDT stock as offices analyze the offbeat, highly-effective platform which has become a magnet for brands and marketers.
In its most recent earnings report, Reddit predicted second quarter revenue between $410 million and $430 million, compared with the average analyst forecast of $395.5 million. This positive forecast on May 1, 2025 comes in light of increased confidence in the platform’s advertising clout. It’s all thanks to its newfangled “conversation placement ads” —where brands inject promoted posts into subreddit convos — pushing a 50% rise in active advertisers year-over-year, the company says.
Up: Why Reddit Stock (RDDT) Is Climbing Today
The growth of Reddit is not just a numbers story; it’s a strategic one. With 108.1 million daily active users — a 31 percent leap over a year ago — the platform is demonstrating its endurance in an ever more crowded world of social media. The changing search landscape is something that CEO Steve Huffman pointed to in a range of potential disruptors of the Google search game. “We’ve seen these spikes from Google throughout the year and we expect more,” Huffman said on the earnings call. But Reddit has been at the cutting edge of AI improvements and engaging its audience.
While rival Snap, which is narrower in focus, had declined to provide a forecast, claiming economic uncertainty, Reddit’s bold forecast reflects the strength of digital advertising behemoths like Meta, which also reported strong ad sales. For investors watching RDDT stock, this indicates Reddit not only thriving in the face of trade tensions and budget fears that weigh on the ad market.
How can RDDT Investors Make a Profit?
The stock rally from Reddit–still 27 percent lower year-to-date post its March 2024 IPO–provides a chink of hope. Analysts view the $392.4 million in Q1 revenue (up 61% from 2024) and surprise profit of 13 cents per share as evidence of sustainable growth. Valued at roughly $15 billion, RDDT is in a battle with TikTok, Instagram and Facebook for ad dollars, highlighting its niche communities to differentiate itself.
“Reddit’s ad tech investments are paying off,” said Laura Chen, an industry analyst. “It’s creating an environment in which brands have a more direct connection with active users, who are not just passive users that are scrolling on a phone.” For those considering buying Reddit stock, the question is whether this momentum can continue, given Google’s AI-driven search changes and broader economic pressures.
Disclaimer: This article is for informational purposes only and not financial advice. Consult a financial advisor before making investment decisions.
