Reddit Earnings Preview: AI Partnerships and Ad Growth Drive Stock Surge

Reddit (RDDT), the popular social media platform, is set to announce its fourth-quarter earnings post-market on Wednesday, a year after its successful IPO.

Since 2025, RDDT's stock has performed exceptionally, gaining over 33% and 363% compared to February 2024. This outperformance surpasses the broader tech sector, including the "Magnificent 7" Big Tech stocks.

Financial Projections

According to Bloomberg consensus estimates, analysts anticipate that Reddit will report the following for Q4:

* Adjusted diluted EPS: $0.48
* Revenue: $405.5 million
* Daily active users: 103.8 million

AI Partnerships and Growth Drivers

Reddit's success is attributed to revenue growth from its advertising business and lucrative licensing deals with AI giants.

* Partnership with OpenAI allows the latter to train its large language model using Reddit content.
* A similar licensing agreement with Google reportedly generates $60 million annually.

Analyst Outlook

Brokers have reaffirmed their bullish outlook on RDDT:

* Raymond James raised its price target to $250, citing advertising revenue and data licensing.
* Deutsche Bank boosted its target to $235, emphasizing AI-driven advertising durability.
* Jefferies maintains a $230 target, indicating strong conviction in the company's long-term growth.

Peers' Performance and Outlook

Positive earnings from other digital advertising companies, such as Snap, Pinterest, Meta, and Google, bode well for Reddit.

Conclusion

With its AI partnerships, advertising growth, and focus on international expansion, Reddit continues to outperform its peers. Analysts expect strong financial results, bolstering the company's status as a high-growth platform.