Reddit, Inc. (RDDT): A Bull Case Theory

We came crossed a bullish thesis connected Reddit, Inc. connected Darius Dark Investing’s Substack. In this article, we volition summarize the bulls’ thesis connected RDDT. Reddit, Inc.'s stock was trading astatine $216.47 arsenic of November 28th. RDDT’s trailing and guardant P/E were 99.76  and 61.35 respectively according to Yahoo Finance.

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Reddit, Inc. operates a integer assemblage successful the United States and internationally. RDDT, historically viewed arsenic a chaotic integer forum, has transformed into a compelling concern with a unsocial strategical presumption successful the AI era. The company’s halfway advertizing business remains strong, driving gross maturation and profitability, but the semipermanent upside lies successful monetising its immense repository of authentic quality conversations.

Reddit’s level hosts millions of topic-specific communities, providing high-quality, structured information captious for grooming AI systems. Landmark licensing deals with Google and OpenAI, generating implicit $130 cardinal annually, demonstrate the strategical worth of this plus and people the opening of a high-margin, recurring gross stream. This inaugural not lone diversifies gross beyond advertizing but besides creates a flywheel effect: AI licensing gross funds merchandise improvements, which pull much users and further enrich Reddit’s data, enhancing its aboriginal pricing power.

Financially, Reddit is showing transformative momentum. In Q2 2025, gross surged 78% year-over-year to $500 million, portion nett income reached $89 million, driven by a 90.8% gross margin. Daily progressive users grew 21% to 110.4 million, with ARPU up 47% to $4.53, reflecting effectual monetisation alongside idiosyncratic growth.

The institution is besides expanding globally, addressing the under-monetised planetary idiosyncratic basal done multilingual support, localised content, and assemblage engagement, peculiarly successful high-potential markets similar India, Brazil, and the Philippines. This enlargement not lone boosts gross but enriches Reddit’s AI dataset with diverse, non-English content, expanding its strategical worth for licensing deals.

Despite a demanding valuation, Reddit’s superior growth, profitability, and defensible community-driven exemplary acceptable it isolated from peers. While risks remain around contented moderation and idiosyncratic sentiment, the convergence of advertising, AI licensing, and planetary enlargement positions Reddit arsenic a uncommon exertion institution wherever the astir quality spot connected the net whitethorn besides go 1 of the astir valuable.

Previously we covered a bullish thesis connected Reddit, Inc. (RDDT) by mylizard successful December 2024, which highlighted untapped gross imaginable done amended monetisation, idiosyncratic engagement incentives, and contented authenticity improvements. The company's banal terms has appreciated astir 29.49% since our coverage. This is due to the fact that the thesis played out. Darius Dark shares a akin presumption but emphasizes Reddit’s AI information licensing and planetary enlargement arsenic cardinal maturation drivers.