Reddit (RDDT) Surges 6.13% on AI-Driven Momentum: Can This Bull Run Continue?

Summary
• Reddit (RDDT) rockets to an intraday high of $211.9, up 6.13% from $199.09
• AI-focused news and a 52-week high of $230.41 fuel speculation
• Leveraged ETFs like the Renaissance IPO ETF (IPO) surge 4.08%
Reddit’s (RDDT) explosive 6.13% intraday rally has thrust it into the spotlight, with the stock trading near its 52-week high of $230.41. The move coincides with a Wall Street Journal article highlighting Reddit’s strategic position in the AI-driven internet search landscape. With a dynamic P/E ratio of 171.26 and a 5.83% turnover rate, the stock’s volatility underscores its speculative allure in a sector dominated by tech giants.

AI Disruption Fuels Reddit's (RDDT) Record Intraday Gains
Reddit’s (RDDT) 6.13% surge is directly tied to its positioning as a key player in the AI-driven internet search revolution. A Wall Street Journal article emphasized Reddit’s unique ability to aggregate user-generated content and community insights, making it a valuable data source for AI models. This narrative has attracted speculative buying, particularly from investors betting on Reddit’s potential to outperform traditional social media peers like Meta (META). The stock’s 6.13% gain also reflects broader enthusiasm for AI-driven tech stocks, with Reddit’s 52-week high of $230.41 acting as a psychological catalyst.

Communication Services Sector Rally: Reddit Outpaces Meta (META) as AI Narrative Gains Traction
Reddit’s (RDDT) 6.13% intraday gain dwarfs the 1.15% rise in Meta (META), the sector leader. The Communication Services sector, which includes internet content and social media firms, is seeing renewed interest due to AI-driven data monetization opportunities. Leveraged ETFs like the Renaissance IPO ETF (IPO) and Global X Social Media ETF (SOCL) have surged 4.08% and 1.21%, respectively, reflecting the sector’s momentum. Reddit’s aggressive growth contrasts with Meta’s more conservative 1.15% move, highlighting divergent investor sentiment toward AI-focused versus established social media platforms.

High-Leverage Call Options and ETFs Signal Aggressive Bullish Play
• MACD: 12.54 (above signal line 7.40), RSI: 83.37 (overbought), 200D MA: $139.64 (well below current price)
• Bollinger Bands: Upper $191.80 (below current price), Middle $154.62 (far below), Lower $117.44
Reddit’s (RDDT) technicals suggest a short-term bullish trend amid overbought conditions. The stock is trading 57% above its 200-day moving average and has broken out of a long-term range. The Renaissance IPO ETF (IPO) and Global X Social Media ETF (SOCL) offer leveraged exposure to the sector’s AI-driven momentum.
Top Options:
• RDDT20250815C210 (Call, $210 strike, 2025-08-15):
- IV: 64.56% (moderate), Leverage Ratio: 21.39%, Delta: 0.55, Theta: -0.8985 (high time decay), Gamma: 0.0175 (high sensitivity), Turnover: 1,012,822
- Payoff at 5% Upside: $211.3 → $221.87 → $11.87 gain per contract. This call offers high leverage and liquidity, ideal for capitalizing on a continuation of the AI-driven rally.
• RDDT20250815C212.5 (Call, $212.5 strike, 2025-08-15):
- IV: 63.33% (moderate), Leverage Ratio: 24.89%, Delta: 0.51, Theta: -0.8597 (high time decay), Gamma: 0.0180 (high sensitivity), Turnover: 262,419
- Payoff at 5% Upside: $211.3 → $221.87 → $9.37 gain per contract. This option balances leverage and strike price, offering a safer entry for bulls expecting a pullback before the $230.41 52-week high.
Action: Aggressive bulls should prioritize RDDT20250815C210 for maximum leverage, while cautious traders may use RDDT20250815C212.5 as a hedge against a potential pullback.

Backtest Reddit Stock Performance
Reddit's (RDDT) stock performance after a 6% intraday surge shows a bullish trend, supported by strong earnings, technical indicators, and options flow. Backtesting reveals robust performance over various time frames:1. Short-Term Gains: The 3-day win rate is 59.76%, the 10-day win rate is 66.27%, and the 30-day win rate is 76.33%. This indicates a high probability of positive gains in the immediate aftermath of the surge.2. Cumulative Returns: The backtest shows that RDDT can build upon its initial momentum. Over 30 days, the cumulative returns are 15.93%, indicating strong medium-term performance.3. Maximum Returns: The maximum return during the backtest period is 27.10%, which occurred on day 58 after the initial surge. This highlights the potential for substantial gains if held for a longer period.4. RSI and MACD: The Relative Strength Index (RSI) at 80.91 suggests that the stock is in an overbought territory. However, the Moving Average Convergence Divergence (MACD) at 7.23 and bullish K-line patterns indicate that the upward momentum is likely to persist.In conclusion, Reddit's (RDDT) stock performance after a 6% intraday surge shows a bullish trend, supported by strong technical indicators and backtest results. These factors suggest that aggressive investors may consider RDDT20250808C200 as a potential entry point, while hedgers could use RDDT20250815P190 for downside protection.

Reddit’s (RDDT) AI Narrative Gains Critical Momentum: Watch for $210 Support and $225 Resistance
Reddit’s (RDDT) 6.13% intraday surge is a testament to its strategic positioning in the AI-driven internet search landscape. While the stock’s overbought RSI and high leverage options suggest caution, the broader Communication Services sector’s rally—led by a 1.15% gain in Meta (META)—indicates sustained investor appetite for AI-related plays. Key levels to monitor include the $210 support (200-day MA at $139.64 is irrelevant here) and the $225 resistance (close to the 52-week high of $230.41). Aggressive bulls should prioritize the RDDT20250815C210 call option for maximum exposure, while hedging with the RDDT20250815C212.5 if the stock consolidates. Watch for a breakdown below $210 or a breakout above $225 to confirm the next move.