Reddit Stock Soars 13.56% on Strong Earnings, AI Growth

Reddit's stock surged 13.56% in pre-market trading on August 1, 2025, driven by strong earnings reports and optimistic forecasts for the third quarter.

Reddit's second-quarter earnings report exceeded expectations, with revenue reaching $500 million, a 78% year-over-year increase. The company's earnings per share (EPS) of $0.45 also surpassed forecasts, marking a significant surprise. This robust performance has fueled investor optimism, leading to a surge in the stock price.

Reddit's forecast for the third quarter is equally impressive, with projected revenue between $535 million and $545 million. The company is betting on growing digital advertising driven by its artificial intelligence capabilities, which has further bolstered investor confidence. The strong revenue growth and positive outlook have contributed to the stock's upward momentum.

Analysts have offered various perspectives on Reddit's outlook, with some highlighting the potential upside from AI-driven advancements and increased advertising demand. However, there are also concerns about the company's reliance on search referral traffic and potential signs of slowing user growth. Despite these mixed views, the overall sentiment remains positive, with many analysts maintaining bullish ratings on the stock.