Reddit Shares Rally 1.40% on $1.92 Billion Surge to 24th in Market Activity Amid Analyst Split and Volatile Options Flows

Reddit (RDDT) surged 1.40% on Sept. 3, 2025, with a trading volume of $1.92 billion, a 89.42% increase from the previous day, ranking it 24th in market activity. Technical indicators suggest mixed signals, with Bollinger Bands narrowing on the 15-minute chart and a KDJ death cross signaling potential downside momentum. Options activity, particularly heavy call buying at 230–245 strikes, amplified short-term volatility despite a bearish MACD histogram (-3.5) and a neutral RSI (47.6). The stock remains 6.5% below its 52-week high of $253.14, with key resistance at $239.37 and support near $224.65.

Analyst sentiment is divided, with Wall Street Zen downgrading the stock to "Hold" from "Buy," while Seaport Res Ptn upgraded it to "Strong Buy." The average price target stands at $175.38, supported by 13 "Buy" ratings but tempered by nine "Hold" assessments. Institutional investors, including Coatue Management and Hsbc Holdings, have increased stakes, with Coatue’s $1.1 billion position representing 3.6% of its portfolio. Meanwhile, insiders sold 468,777 shares in the last 90 days, reflecting mixed confidence.

Reddit’s recent performance contrasts with its sector, as the Internet Content & Information index remains subdued. While Meta (META) rose just 0.53% intraday, Reddit’s move appears driven by stock-specific factors, including speculative options flows and technical dynamics. The company’s Q3 2025 guidance and strong Q2 earnings—reporting $0.45 EPS and 77.9% revenue growth—highlight its growth trajectory, though rising expenses and Google-related traffic risks remain concerns.

Backtest results indicate Reddit’s rally is a blend of technical overbought conditions and options-driven momentum. A breakout above $239.37 could target $248.30, but a reversal below $224.65 would signal a shift in sentiment. The 230–235 call options, with high leverage and gamma, offer exposure to potential upside, though time decay and volatility pose risks. Investors should monitor key levels and sector dynamics for further clarity.