Why Is Reddit (RDDT) Stock Rocketing Higher Today

What Happened?

Shares of online community and discussion platform Reddit (NYSE:RDDT) jumped 42.4% in the morning session after the company reported strong third-quarter earnings. Reddit beat on revenue and EBITDA, especially despite the slight DAU underperformance. However, platform engagement was still strong, with Logged-out users up 70% year-over-year. Notably, the company reported that "Reddit" was the sixth most Googled word since the start of the year, pointing to the strong potential to convert more internet users to its platform. It also highlights the potential to continue to grow and optimize ad revenue as the company continues to experiment with new ad formats. Reddit's optimistic EBITDA forecast for the next quarter also blew past analysts' expectations. Overall, this was a great quarter for the company.

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What The Market Is Telling Us

Reddit’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. But moves this big are rare even for Reddit and indicate this news significantly impacted the market’s perception of the business.

Reddit is up 126% since the beginning of the year, and at $113.89 per share, has set a new 52-week high. Investors who bought $1,000 worth of Reddit’s shares at the IPO in March 2024 would now be looking at an investment worth $2,258.

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