Reddit Shares Soar 17.47% on Strong Earnings $5.16 Billion Volume Ranks 16th in Market Activity Driven by AI and Global Growth

On August 1, Reddit (RDDT) surged 17.47% with a trading volume of $5.16 billion, ranking 16th in market activity. The stock’s performance followed a robust Q2 earnings report that exceeded revenue and profit expectations.

The social media platform reported $500 million in revenue, a 78% year-over-year increase and 17% above forecasts. Net income jumped to $89 million, reversing a prior-year loss. Advertising revenue rose 84% to $465 million, driven by AI-powered optimization tools like Reddit Answers, which now serves 6 million weekly users. CEO Steve Huffman highlighted AI-driven engagement and international expansion as key growth drivers, with 50.4% of daily active users now outside the U.S.

Reddit’s user base grew 21% year-over-year to 110.4 million daily active users, supported by multilingual machine translation and market expansion into regions like France and Brazil. The company projected Q3 revenue of $535–545 million and adjusted EBITDA of $185–195 million, reflecting strong operational leverage. A 90.8% gross margin and $111 million in operating cash flow further reinforced investor confidence in its monetization strategy.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present, outperforming the benchmark return of 29.18% by 137.53%. This underscores the role of liquidity concentration in short-term stock performance, particularly in volatile markets. The outperformance highlights the effectiveness of leveraging high-volume stocks for capturing price volatility, though risks from abrupt market shifts remain significant.