New York, May 20, 2026, 16:02 EDT
Reddit shares slipped around 5% late Wednesday, falling under $150 as the company launched new in-app ad tools it hopes will show growth in its ad business. The stock traded at $146.84, down 5.19%, at 3:56 p.m. EDT on Google Finance, after earlier bottoming at $143.91 with volume running much higher than usual.
Reddit is still trading like a fast-growing tech stock, not an older media company. The drop in Reddit shares went the other way from the main indexes: the SPDR S&P 500 ETF was up around 1% and the Invesco QQQ Trust, which tracks big tech and growth stocks, climbed about 1.6% in late trading.
Reddit said Wednesday it saw a 129% jump in app install volume from advertisers over the past year. The company also pushed forward on automating ad buying and measurement, making some tools widely available. “Max campaigns” for app ads are now in beta, according to Reddit, while App Event Optimization is rolling out generally. A new first-party measurement product, Dual Attribution, using Reddit data to track user response to ads, is in beta. “Max campaigns drive stronger performance with less manual work,” said Jyoti Vaidee, Reddit’s vice president of ads product. Reddit Inc
Cost per action, or CPA, is a key part of Reddit’s ad pitch. The company said initial split tests with Max app campaigns lowered CPA by 15% on average and lifted results volume 28%. In beta, App Event Optimization improved CPA by 22%, according to Reddit. These numbers come from Reddit, and investors are watching to see if they stick once campaigns move beyond controlled tests.
Reddit faced new pressure from insider selling. A Form 4 filing with the U.S. Securities and Exchange Commission on May 19 showed a trust linked to CEO Steve Huffman sold 18,000 Class A shares on May 15, following option exercises. Weighted average sale prices were between $154.19 and $158.96. The filing said the sales were under a Rule 10b5-1 plan, which was put in place in May 2025.
Reddit first-quarter revenue jumped 69% to $663 million, with ad revenue up 74% at $625 million. Daily active uniques, or DAUq, increased 17% to 126.8 million. The company posted net income of $204 million. CEO Steve Huffman said Reddit is a “one-of-one business” and has a “unique advantage in the age of AI.” Reddit Investor Relations The company’s fundamentals looked strong, even as the stock traded lower.
Reddit stuck to a second-quarter revenue target between $715 million and $725 million and projected adjusted EBITDA from $285 million to $295 million. Adjusted EBITDA takes out interest, taxes, depreciation, amortization, and other costs, and Reddit uses it to track main operating results.
Some on the sell side still see reasons to be positive, but aren’t all-in. Goldman Sachs’ Eric Sheridan bumped his Reddit price target up to $200 from $180 and stuck with a Neutral call. Sheridan cited steady user growth, AI and search trends, ads, solid EBITDA, and a careful stance on data licensing, The Fly reported via TipRanks.
Social media stocks were mixed late. Meta ticked up, Snap added about 1%, and Pinterest edged lower. Reddit fell more, standing out Thursday as weaker than the other digital ad names.
Reddit is making its case that a smaller ad platform can still grab dollars from the bigger players. After its first-quarter earnings, Reuters reported Reddit’s AI-driven ad tech puts ads into the right subreddit conversations. COO Jen Wong said Reddit was “still hiring and adding” people, even as Meta, Snap, and Pinterest have laid off staff. Reuters
But the risks are clear. If Reddit’s new ad products don’t keep lowering costs for advertisers, or if insider selling keeps getting noticed, the valuation could stay weak. There’s also the question of traffic: Reuters said last year Reddit fell short on user growth after Google tweaked its search algorithm, and Susannah Streeter at Hargreaves Lansdown said AI-powered overviews might push “more prominence to less well-known sources.” Reuters
Reddit’s message Wednesday was direct. Investors see growth, but want to know if it can hold up when comps get harder, regulation ramps up, and digital ad giants keep calling the shots.
