Reddit Stock Soars 2.46% on Strong Earnings Despite Legal Storm Ranks 56th in 1.23B Trading Volume

On August 11, 2025, Reddit (RDDT) closed with a 2.46% gain, trading on $1.23 billion in volume, placing it 56th in the day’s equity market rankings. The stock’s performance coincided with renewed scrutiny over its business strategy and legal challenges.

Shareholders holding Reddit securities between October 29, 2024, and May 20, 2025, face ongoing class-action litigation. The lawsuit alleges the company misrepresented the impact of Google’s algorithm changes and AI features on its traffic, which allegedly reduced user engagement without adequate disclosure. The firm’s failure to address these challenges in the short term has raised questions about its operational transparency.

Meanwhile, Reddit reported robust Q2 2025 results, with 78% year-over-year revenue growth and an earnings-per-share (EPS) beat of $0.25. Analysts highlighted its AI-driven advertising tools and expanded search initiatives, including Reddit Answers, as key growth drivers. Multiple brokerages raised price targets, with Morgan Stanley and Needham setting new benchmarks above $210. However, broader market volatility linked to U.S. jobs data and trade policies tempered investor enthusiasm midday.

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.