Reddit shares jumped 16% in premarket trading after the company issued an upbeat quarterly revenue forecast, highlighting growing returns from its AI-driven advertising tools. These tools help advertisers place targeted ads within relevant discussion threads across subreddits.
The strong results signal Reddit's strategy is working as it competes with ad giants like Meta, Snap, and Pinterest. COO Jen Wong told Reuters the company is still hiring, contrasting with rivals that have cut thousands of jobs over the past year to focus on AI.
Reddit's daily active unique visitors grew 17% to 126.8 million, while global average revenue per user increased 44%. Morgan Stanley analysts said execution in U.S. user growth is key to driving multiple expansion. Reddit has a 12-month forward P/E of 30.40, well above Snap's 9.93, Pinterest's 10.27, and Meta's 19.05.