Reddit Inc (NYSE:RDDT) shares are trending Monday morning as traders keep leaning into the company's post-earnings narrative that ad momentum is outweighing softer user growth. Here’s what investors need to know.
- Reddit stock is showing upward movement. Why is RDDT stock trading higher?
What’s Driving Reddit’s Stock Rally?
The latest push higher follows upbeat first-quarter results where ad revenue grew 74% year-over-year, extending a streak of seven straight quarters with ad growth above 60%. Analysts also pointed to active advertisers rising 75% year-over-year, while U.S. DAUq came in at 53.5 million versus expectations of 53.8 million.
Reddit's first-quarter revenue jumped 69% year over year to $663 million, with advertising revenue at $625 million and gross margin at 91.5% for a seventh straight quarter above 90%. The stock's post-earnings narrative also leans on operating leverage, with free cash flow margin at 47% and capital spending at $1 million, as free cash flow became a headline metric for bulls.
Critical Levels To Watch For RDDT Stock
Reddit is trying to rebuild its longer-term trend after a sharp pullback from the September 2025 52-week high, and the chart is now caught between improving short-term momentum and weaker long-term structure. At $172.26, the stock is trading 11.9% above its 20-day simple moving average (SMA) and 3% below its 100-day SMA, which points to near-term strength that still hasn't fully reclaimed the intermediate trend.
The moving-average stack is mixed: the stock is 18.1% above its 50-day SMA but 11.4% below its 200-day SMA, and the death cross that formed in March keeps longer-term trend-followers cautious until the gap closes. The moving average convergence divergence (MACD), a trend/momentum measure, is slightly bearish with the MACD line just below the signal line and a negative histogram, which reads like upside momentum is cooling rather than accelerating.
- Key Resistance: $176.00 — near the 100-day SMA area where rallies can stall.
- Key Support: $138.00 — a prior demand zone where buyers have tended to step in.
Reddit is up 46.97% over the last 12 months, which shows the longer-term tape is still positive even after the big swing down from the highs. With the stock sitting well above the $94.89 52-week low but far below the $282.95 high, positioning looks more like a rebound attempt than a return to peak momentum.
What Is Reddit And How Does It Make Money?
Reddit is a social media platform where users can engage in conversations, explore, and create communities centered around their interests. Founded in 2005 by Steve Huffman and Alexis Ohanian, it has grown into a network of user-generated content organized into specialized forums known as subreddits.
Its model leans heavily on community culture and volunteer moderators, while monetization is increasingly tied to advertising and data licensing agreements. That's why the market is reacting so strongly to metrics like ad revenue growth and advertiser counts, those are the levers that can scale faster than user growth alone.
Reddit Analyst Rating Updates
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $228.81. Recent analyst moves include:
- Piper Sandler: Overweight (Raises Target to $215.00) (May 1)
- Wells Fargo: Equal-Weight (Raises Target to $176.00) (May 1)
- Cantor Fitzgerald: Neutral (Raises Target to $180.00) (May 1)
Reddit’s Benzinga Edge Rankings Explained
Below is the Benzinga Edge scorecard for Reddit,, highlighting its strengths and weaknesses compared to the broader market:
- Momentum: Neutral (Score: 43/100) — The stock's trend is improving, but it's not a clear market leader right now.
- Value: Weak (Score: 15.99) — The setup implies a pricey stock versus typical valuation benchmarks.
- Growth: Strong (Score: 98.34) — The score reflects expectations for fast expansion compared with most stocks.
The Verdict: Reddit,’s Benzinga Edge signal reveals a growth-heavy profile where investors are paying up for expansion. With momentum only moderate and value weak, the stock tends to trade more on execution and continued monetization progress than on cheapness.
RDDT Stock Price Activity on Monday
RDDT Stock Price Activity: Reddit shares were initially up more than 3% on Monday. The stock was down 0.10% at $166.46 at the time of publication on Monday, according to Benzinga Pro data.
Image: Shutterstock
Login to comment