Shares of Reddit (RDDT 6.21%) were moving higher this week, even though there was no news out on the social media stock. Instead, the company seemed to benefit from the broader rebound in the stock market, driven by cooling trade tensions, and gained on Friday in sympathy with a better-than-expected earnings report from Google parent Alphabet.
Super Micro Computer (SMCI 8.85%), more commonly known as Supermicro, lost more than two-thirds of its market value over the past 12 months. The server company's booming artificial intelligence (AI) business once made it a red-hot growth stock, but the bulls retreated as it struggled with accounting issues, a delayed 10-K filing, delisting threats, and regulatory subpoenas.
Reddit Inc. (RDDT) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Social media platform Reddit was down for thousands of users globally on Monday, according to outage tracking website Downdetector.com.
Reddit Inc. (RDDT) concluded the recent trading session at $96.46, signifying a -1.83% move from its prior day's close.
Despite the recent 57% drawdown in Reddit's stock price from its peak, the company's long-term growth potential remains intact, driven by innovative ad products and increasing user engagement. Its Q4 FY24 earnings showed strong revenue growth of 71% YoY and significant profitability improvements, though smaller revenue and earnings beats compared to prior quarters likely impacted investor optimism. While short-term volatility can be expected due to tariff uncertainties and potential ad spending slowdown, Reddit's unique ad units and high-margin data licensing offer some resilience.
Tariff fears have created attractive buying opportunities among high-quality growth names. The latest quarter saw the company post 71% YoY revenue growth and 39% YoY user growth, with significant contributions from international markets and machine translations. Despite tariff uncertainties, RDDT's low ARPU compared to peers suggests sustained 20% top line growth over the next decade.
Reddit's stock, down ~50% from its peak, is now a compelling buy, due to its strong user growth and diversified revenue streams. Beyond general market volatility, Reddit stock fell because it reported a decline in U.S. users in Q4, which was driven by a Google search algorithm changed. Management notes that this has happened periodically through Reddit's history, and that it has regained momentum in Q1.
Even though the technology sector in the United States has been the center of attention in recent weeks as President Trump's rollout of trade tariffs has started to lower expectations and outlooks for the United States economy and, therefore, the stock market, there is still new hope for certain stocks inside this environment. Investors should look for some of the “tariff-free” names in this area as well as others if they want their portfolios to be safe.
Alphabet GOOGL is a behemoth in the digital advertising market in which Reddit RDDT is the latest challenger. Increasing deployment of AI and machine learning are driving content creation, while chatbots and virtual assistants are helping advertisers offer personalized user interactions and content personalization.
In the closing of the recent trading day, Reddit Inc. (RDDT) stood at $109.50, denoting a -0.5% change from the preceding trading day.