Reddit's logged-in users drive monetization, so weak search-driven traffic matters less than ARPU. Reddit says app and logged-in users grew sequentially in Q3 and generate over 80% of monetization, though lost search referrals also hurt them. ARPU rose 53% despite barely higher users; a low ad base could allow it to double even with muted growth. Restricting Google scraping might force a licensing deal that helps its Anthropic case and OpenAI renewal, though no deal is certain. x.com  x.com  x.com  … Show more

Reddit's human conversations are gaining value as AI content proliferates, supporting advertiser spending and AI data licensing. Revenue grew 61% last quarter, with margins in the 40s, but US user growth slowed to 6%. Advertisers are paying more each quarter and AI labs pay for Reddit's data. Overweight; $200 target. x.com 

Reddit's worsening US user growth threatens its revenue runway despite elite ARPU growth, revenue growth and margin expansion. US daily users fell 2% year over year and missed estimates by 7%; the Q4 guide was weak. It needs healthier user growth in its most important market to dispel Google/AI discovery fears. Forward indicators do not look promising, and the trend of positive estimate revisions will end. x.com  x.com 

Reddit is well placed as the source every AI model wants to license training data from, while its ad revenue booms. Q2 revenue rose 61% to $804.9 million, operating income more than tripled to $231.7 million and net income reached $252.8 million. At about 17 times two-year forward earnings, the stock isn't expensive. x.com  x.com 

Reddit's Google AI contract will likely be renewed on richer terms, making the sell-off over it senseless. In a study of 30M sources across ChatGPT, Gemini, Perplexity and AI Overviews, Reddit was the single most cited domain, which gives it leverage in the renewal. The stock has nearly made back the drop. x.com 

Reddit may face short-term pressure after Morgan Stanley cut its price target from $240 to $210 while keeping Overweight, adding risk premium for possibly slowing user growth and shifting Google traffic, especially AI Overviews reducing referrals. Morgan Stanley stays positive on revenue and EPS growth, and advertising, AI data licensing and Reddit Max remain long-term catalysts. Renewed strength in Google traffic and DAU/WAU growth could bring the target back up. x.com 

Reddit's AI licensing is the wildcard that could make the stock run, as the market may have grown too negative on its renewals with Google and OpenAI. AI models need fresh human-generated data, and Reddit's is still undervalued. Revenue grew 61% last quarter, ad revenue 64%, and margins keep improving. Per BofA, Reddit should post the highest US and international ARPU growth of the social stocks it follows in Q3. Trading below the 200-day average is a risk, with support at $120-135. x.com  x.com 

Reddit is turning into a high-margin AI data infrastructure business, with a path to over $500 million a year in data licensing. Its Google and OpenAI deals already bring in more than $130 million annually at margins above 90%, institutions own 93.5% of shares with $9.1 billion of net buying, and the market underestimates this. A post the author replies to cites Reddit's CEO saying Reddit is the most-cited source across LLMs, with S&P 500 inclusion and deal renewals on the horizon. x.com  x.com 

Reddit's main business is declining and its data licensing business is too limited to make up for it. x.com 

Reddit is the most undervalued communication-services stock because it should be valued as AI-era data infrastructure, not just a social media and ad platform. Its 20 years of authentic, in-depth human conversation, over 25 billion posts and comments, earned licensing deals with Google, about $60 million a year, and OpenAI; analysts see such deals reaching $400 million a year by 2027. Reddit Answers grew weekly users from 1 million to 15 million in 2025, and AI ad targeting lifts revenue. x.com