Reddit Inc stock soars 15%: Is it time to buy into the hype? What is the reason behind the jump?
Shares of Reddit Inc. (traded as
RDDT
) witnessed a sharp upswing early Tuesday, surging over 15% shortly after the market opened. The dramatic rise has triggered intense interest among retail and institutional investors, prompting renewed discussions around the stock's long-term potential and its underlying fundamentals.
With Reddit's current stock price at $145.48, up $19.29 from its previous close, market observers are evaluating whether this momentum signals a durable breakout or a short-lived speculative bounce, as mentioned in a report by Bloomberg.
Early Trade Snapshot: Strong Opening Spurs Optimism
According to trading data as of 9:41 a.m. GMT-4, Reddit Inc. opened at $134.00, significantly higher than its prior close of $126.19, and climbed rapidly to hover near the intraday high of $145.69. The price movement reflects intense early-session buying, driven largely by positive sentiment surrounding Reddit's technological and advertising developments.
For traders relying on short-term price action, the steep climb has become a focal point for potential entry, although analysts caution against overlooking the risks posed by the stock's extreme volatility.
Valuation Metrics Show High Growth Expectations
The bullish movement has reignited debate about Reddit's sky-high P/E ratio of 233.35, which many analysts interpret as a reflection of elevated growth expectations. While high multiples are common for tech-driven platforms, such valuation levels also amplify downside risks in case of earnings misses or changing market sentiment.
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Reddit's 52-week trading range—from $49.13 to $230.41—further underlines its volatility. Currently trading in the upper half of this band, the
RDDT stock
remains well below its historic peak, signaling both room for further growth and the potential for pullbacks.
No Dividend, But Big Tech Ambitions
True to its growth-stage character, Reddit offers no dividend yield, choosing instead to reinvest in innovation and expansion. The company recently unveiled a set of AI-powered advertising tools—a move that many see as central to its future revenue model.
Announced at the Cannes Lions Festival, these tools include Reddit Insights, a real-time community listening platform for marketers, and Conversation Summary Add-ons, which allow brands to attach positive Reddit discussions under their ads. Powered by the company's proprietary Reddit Community Intelligence engine, these tools are designed to help brands better understand and engage with Reddit's highly interactive user base.
'Reddit is positioning itself as a serious player in the AI marketing space,' the company stated in its announcement. Early testing partners include Publicis, Lucid, and Jackbox Games.
Investor Take: A High-Risk, High-Reward Proposition
From a technical standpoint, Reddit's explosive price action may present opportunities for aggressive day traders looking to ride the wave. However, the elevated valuation, lack of dividends, and wide price swings make it a precarious choice for long-term investors, as per a report by CNBC.
Bullish arguments centre around Reddit's innovation in AI advertising, its massive online community, and recent revenue growth. Bearish views, however, highlight concerns over overvaluation, excessive volatility, and the risk of buying after a sharp rally.
Weigh the Momentum Against Fundamentals
Reddit's recent price jump—fuelled by optimism around its AI initiatives and digital advertising push—offers a compelling case for investors who can stomach risk and are chasing high returns. However, caution is warranted. With rddt stock trading at lofty valuations and exhibiting unpredictable movements, prudent investors may prefer to wait for consolidation or clearer earnings trajectories before entering.
FAQs
Why did Reddit Inc. (RDDT) stock jump over 15% on June 17, 2025?
Reddit shares surged more than 15% due to strong early-session buying interest, sparked by optimism around its AI-powered advertising tools and positive investor sentiment. The stock opened at $134.00 and quickly climbed to an intraday high of $145.69.
What is Reddit's current stock price and valuation?
As of the latest trading data, Reddit is priced at $145.48, reflecting a gain of $19.29 from the previous close. It carries a high P/E ratio of 233.35, suggesting elevated investor expectations for future growth.
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