Reddit stock surges after S&P 500 inclusion — here’s the platform’s next big opportunity
Brian Sozzi· Executive Editor
Fri, August 14, 2026 at 7:25 PM GMT+5:30
2 min read
- RDDT
+11.99% - ^GSPC
-0.19%
Reddit (RDDT) is officially all grown up
S&P Dow Jones Indices said late Thursday that Reddit will be added to the S&P 500 (^GSPC) prior to the start of trading on Aug. 18
Reddit stock rose more than 15% in early trading
(RDDT)
Go deeper with AlphaSpace
177.08+18.96(+11.99%)
As of 3:34:45 PM EDT. Market Open.
Reddit enters the benchmark index eyeing one big opportunity ahead in using the artificial intelligence backdrop to carve out more advertising sales
People who are growing frustrated with AI slop and useless AI summaries are already gravitating toward Reddit’s long, human conversations, the platform’s co-founder Steve Huffman told Yahoo Finance in a recent interview (video above)
“Reddit is so naturally commercial: Forty percent of the conversations people are having organically on Reddit are more or less about what to buy,” Huffman said. “They don’t say, ‘What should I buy?’ They say, ‘What should I wear? What should I watch tonight? Where should I go? What’s the best headphone?’ And so, because the organic content is naturally commercial, putting ads alongside it is also a natural thing to do.”
Huffman co-founded Reddit in 2005 with college friend Alexis Ohanian
The strategy appears to be working
Reddit is fresh off reporting a 61% year-over-year revenue increase to $805 million in the second quarter, spearheaded by a surge in advertising revenue as marketers aggressively leaned into the platform’s user communities
Sales have increased by more than 10% in the past 13 quarters, per Yahoo Finance AlphaSpace analysis
Earnings per share ripped higher by 178% to $1.25
On the user front, Reddit’s global footprint expanded by 18% year over year to 130.3 million unique daily active users, driven largely by a 28% international surge and a 36% spike in global average revenue per user (ARPU)
Reddit stock is down 22% this year, however, as investors question whether the growth is sustainable. The S&P 500 is up 13% for the year
“In our view, Reddit’s investments in community and ad monetization should create a durable >30% annual revenue growth business with a path to 50% EBITDA margin,” KeyBanc analyst Justin Patterson wrote in a recent note. “Further, we believe Reddit’s data is becoming more valuable to LLMs and model training, creating a potential upside catalyst into 2027. In our view, Reddit is a unique way to participate in AI growth with an asset-light business model.”
Brian Sozziis Yahoo Finance’s Executive Editor, host of thePower Players with Brian Sozzipodcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X@BrianSozzi,Instagram, andLinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com
Click here for in-depth analysis of the latest stock market news and events moving stock prices
Read the latest financial and business news from Yahoo Finance
