Reddit Stock Rebounds to New Highs Despite Google AI Fears

Reddit stock has regained its momentum, reaching new highs despite fears surrounding Google's AI technology. The stock has surged 45% since Q2 results in July, fueled by strong digital advertising growth. Since its IPO in March 2024, Reddit stock has increased by over 300%, reaching a record high of 230.41 in February.

Reddit Inc.'s stock has surged to a new high of 230.49 USD, marking a significant milestone for the company. This remarkable increase comes on the heels of the company's strong second-quarter earnings report, which saw impressive revenue growth and a substantial increase in daily active users [1].

The stock has gained 45% since the company reported its Q2 results on July 31, 2025. This rally has helped Reddit stock regain its momentum, with the stock reaching a record high of 230.41 in February 2025 [2]. Over the past year, Reddit's stock has experienced a remarkable increase of 314.58%, reflecting strong investor confidence and robust market performance [1].

The company's financial health is bolstered by a current ratio of 12.0 and a balance sheet that holds more cash than debt. Reddit boasts exceptional gross profit margins of 91% and has achieved revenue growth of nearly 70% in the last twelve months. This unprecedented growth highlights Reddit’s expanding influence and the increasing value placed on its platform by both users and advertisers [1].

Analysts have responded positively to Reddit's latest financial results, with several firms upgrading their stock price targets. Deutsche Bank raised its target to $205, while Morgan Stanley increased its target to $230. BofA Securities adjusted its target to $180, and Goldman Sachs set a new target of $212. These upgrades reflect a positive outlook from analysts following Reddit's latest financial results [1].

Despite fears about Google's AI technology potentially impacting Reddit's user growth, the company has worked to drive more users directly to its app and website. The "Reddit Answers" feature, which relies on AI to respond to queries, has seen significant growth, reaching 6 million users compared to 1 million in Q1. This initiative is part of Reddit's broader strategy to become a true search destination [2].

Reddit's stock has also been buoyed by increased traffic from AI chatbots, with visits from U.S. users climbing 28% year-over-year in the second quarter. This growth can be attributed to the increasing use of Reddit data by AI chatbots for training algorithms [2].

Reddit's stock is currently listed on the IBD 50 flagship list of top growth stocks, the Tech Leaders list, and the IPO Leaders list. The stock has gained 42% year-to-date and has an IBD Composite Rating of 94 out of 99 [2].

References:
[1] https://www.investing.com/news/company-news/reddit-stock-reaches-alltime-high-of-23049-usd-93CH-4189134
[2] https://www.investors.com/news/technology/reddit-stock-ai-social-media-new-highs/