Reddit Surges on Strong Earnings as $1.08 Billion Trading Volume Ranks 79th Amid Insider Sales and Institutional Buys

On August 12, 2025, Reddit (RDDT) shares rose 1.48% to $223.98, with a trading volume of $1.08 billion, ranking 79th in market activity. The stock’s performance followed a strong quarterly earnings report, with revenue growing 77.9% year-over-year and earnings per share exceeding estimates by $0.25. Analysts highlighted Reddit’s potential as a “picks and shovels” play for AI, driven by its vast user-generated data, though valuation metrics remain elevated, including a P/E ratio of 203.36 and a PEG ratio of 3.42.

Recent insider activity drew attention, with executives selling over $63 million in shares in the past three months, including 33,334 shares by COO Jennifer L. Wong. Despite this, short interest in Reddit declined 15.20% month-on-month, suggesting improving investor sentiment. Institutional ownership trends showed Vanguard Group and JPMorgan increasing stakes, while a class-action lawsuit related to securities fraud added near-term uncertainty for shareholders.

A backtested strategy involving the top 500 stocks by daily trading volume from December 2021 to August 2025 yielded a total profit of $2,940, with an average daily return of 0.24%. The approach faced a maximum drawdown of $-1,960, a Sharpe ratio of 0.67, and a peak Sharpe ratio of 1.2 during the period.