New York, February 6, 2026, 15:37 EST — Regular session.
- Reddit shares slipped roughly 8% in afternoon trading, bouncing between $170.74 and $138.37.
- Company topped quarterly forecasts, projected Q1 revenue ahead of estimates, and cleared up to $1 billion for buybacks.
- Traders are watching to see if ad growth and AI-powered tools will hold as the stock’s volatility continues.
Reddit Inc shares gave up an early surge and skidded roughly 8% lower on Friday, wiping out their post-earnings jump. The social media stock slipped 8.3% to $138.44 by the afternoon, after initially climbing as much as 13% before tumbling to a session low close to $138—even with its first-quarter revenue outlook topping Wall Street forecasts.
Reddit’s sharp reversal stands out—investors are treating it as a high-velocity ad play, and any sign of a slowdown gets hammered. Wild swings this week lay bare just how nervous traders are around these fresh, high-multiple internet stocks.
U.S. stocks jumped Friday, sending the Dow to the 50,000 mark, though action around the “AI trade” stayed unsettled after a tough patch for software and data shares. “This trade has been volatile,” said Ross Mayfield, investment strategy analyst at Baird, citing a push-pull between appetite for AI products and worries about valuations or margins. Reuters
Reddit late Thursday projected first-quarter revenue between $595 million and $605 million, beating the $577.2 million consensus from LSEG. Adjusted EBITDA, with interest, taxes, and certain non-cash items excluded, is seen landing in the $210 million to $220 million range. The company credited new AI-powered tweaks to its ad platform for pulling in advertisers, and rolled out its inaugural share buyback plan—up to $1 billion. Shares jumped roughly 4% in after-hours action, then slid Friday. “Expectations were already high coming into the quarter, but the results still surprised,” Emarketer’s Jeremy Goldman said. Reuters
Reddit’s latest quarter saw revenue surge 70% to $726 million, with ad revenue up even faster—75%—reaching $690 million. Daily active uniques, the metric for users showing up each day, increased by 19% to 121.4 million. CEO Steve Huffman called this “the next era of Reddit,” pointing to sharper execution, global growth ambitions, and new product moves anchored on “real people and conversations.” Reddit Investor Relations
Despite the stock’s drop, some analysts held a positive view on Reddit’s execution—though price targets came down. Piper Sandler’s Thomas Champion lowered his target to $205 from $290 but left his overweight call unchanged, pointing to a strong quarter and what he called “phenomenally well” execution by management, The Fly reported. TipRanks
Reddit spelled it out in its latest 10-K: ads and site traffic remain the key issues for investors. Nearly 94% of 2025 revenue relied on advertising, the company disclosed in Friday’s annual filing. There’s also a warning—shifts in search engine algorithms might drag on traffic. Plus, Reddit pointed to its multi-class share structure, which keeps voting power concentrated among pre-IPO shareholders. SEC
Even so, the stock could remain choppy in the short run. There’s no obligation for the company to buy back shares on a fixed timetable, and if marketers cut spending, ad budgets might shrink fast—especially with expectations already running high and little room for error.
Traders are eyeing whether the post-earnings dip can level out by the close, and if early signs on ad demand line up with the upbeat guidance from the company. The next key marker: Reddit’s first-quarter results, covering the period through March 31, where the company will have to demonstrate that its AI ad tools are actually driving sustainable spending and consistent user growth.
