Reddit Stock Surges 6.89% on $1.73B Volume, Ranks 37th in Daily Trading Activity

Reddit (RDDT) surged 6.89% on August 6, 2025, with a trading volume of $1.73 billion, ranking 37th in daily market activity. The stock, which debuted in March 2024, has seen rapid growth driven by its unique "community of communities" model, hosting over 100,000 forums and 110 million daily active users. Revenue in Q2 2025 reached $500 million, up 78% year-over-year, fueled by 84% advertising revenue growth and a 130-basis-point improvement in gross margin to 90.8%. The company reported a net profit of $89 million, reversing a $10 million loss in the same period the previous year.

Despite these gains, Reddit’s $39 billion market cap has shifted it into large-cap territory, limiting the potential for 100-fold returns that could turn smaller investments into million-dollar holdings. While its P/E ratio of 329 and P/S ratio of 25 highlight valuation challenges, the stock’s forward P/E of 59 suggests some appeal for new investors. Earnings growth, however, is slowing, with Q3 revenue guidance of $535–$545 million signaling a 55% annualized increase but a sequential deceleration.

Reddit’s position as a leading social media platform with strong user engagement and diversified revenue streams (ads, data licensing, subscriptions) supports long-term growth. However, investors must weigh its elevated valuation against slowing momentum and competition from industry giants like Meta. The stock’s trajectory remains tied to its ability to sustain profitability and expand market share in a crowded digital landscape.

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