NEW YORK, December 29, 2025, 2:50 PM ET — Regular session
- Reddit shares rose about 3.8% in afternoon trade, bucking a weaker broader market
- Needham reiterated a buy rating and kept a $300 price target, citing AI-search visibility
- Investors are looking to the next earnings report, with market calendars pointing to Feb. 11, 2026
Reddit, Inc. (RDDT.N) shares rose 3.8% to $234.30 in afternoon trading on Monday after an analyst reiterated a bullish view on the social media platform. The stock opened at $225 and has traded between $222.86 and $234.54, with volume at about 1.8 million shares.
The move followed a fresh Needham note that reiterated a “buy” rating and maintained a $300 price target, arguing Reddit benefits as artificial intelligence (AI) tools answer questions directly on search pages. “As overall referral traffic shrinks, the platforms that AI answers cite (like Reddit) become increasingly valuable,” analyst Laura Martin wrote. Referral traffic is the visits a site gets when users click through from search or other apps. Investors.com
That pitch is landing as investors try to identify winners from changing search behavior heading into 2026. For Reddit, whose communities are built around human-written opinions and recommendations, being cited in AI-generated answers is increasingly seen as a potential advantage in both ad pricing and visibility.
Needham’s call also arrives at a time when high-growth internet stocks have tended to move sharply on incremental signals about demand. Reddit still carries a premium valuation, leaving the shares sensitive to any shift in expectations around advertising and user growth.
Needham’s $300 target implies about 28% upside from Monday’s trading level. A price target is an analyst’s estimate of where a stock could trade over the next year, based on assumptions about growth, margins and risk.
Reddit’s gain came as the broader market drifted lower, with the S&P 500’s largest ETF, SPY, down about 0.4% and the Nasdaq-100 tracker QQQ off about 0.5%. Meta Platforms and Pinterest, two other ad-dependent social media names, were both trading lower.
Reddit went public in March 2024 and has leaned into AI-powered tools designed to help marketers place ads alongside relevant conversations in specific subreddits. It also has content-licensing deals with AI companies including Google and OpenAI, adding a second revenue stream beyond advertising, Reuters reported.
In its last quarterly update, Reddit forecast fourth-quarter revenue of $655 million to $665 million, above analysts’ estimates, as it pointed to strength in AI-driven ad tools, according to Reuters. Investors have been watching whether that momentum can persist as the company scales its ad platform.
The next catalyst is the fourth-quarter earnings report; Reddit has not announced a date, but market calendars estimate Feb. 11, 2026. The results are expected to draw focus on user growth, ad pricing and any update on the pace of licensing revenue.
For investors, the key question is whether the company can keep expanding advertising demand while maintaining discipline on costs as it builds out AI tooling. Any commentary on measurement, automation and advertiser adoption is likely to be closely parsed.
Competition for digital ad budgets remains intense across social media, raising the bar for execution. Reddit’s bull case rests on its communities’ commercial intent — users often arrive to research products, troubleshoot and compare options — which can support higher-value ad placements.
For now, Monday’s move left Reddit outperforming ad peers and the broader market. Traders will be watching whether the stock can hold the gains into the close and carry momentum into early 2026 as the next earnings catalyst approaches.
