Redburn Atlantic Reiterates Sell on Reddit (RDDT) as Google's AI Search Threatens Growth
We recently published a list of . In this article, we are going to take a look at where Reddit Inc (NYSE:RDDT) stands against other AI stocks on latest news and ratings.
On May 28, Redburn-Atlantic analyst James Cordwell reiterated a 'Sell' rating on Reddit Inc (NYSE:RDDT) with a $75.00 price target. Reddit is a social media platform that leverages AI to strengthen search functionality and improve user engagement.
The firm's rating reiteration follows concerns regarding the impact of Google's latest AI advancements on the social media platform. Google's aggressive rollout of AI Mode has led to a boost in AI-based search experiences. This is seen as a potential threat to Reddit's user engagement and revenue growth.
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The analysts further stated that improvements in the tariff situation may not be enough to counter the challenges of the evolving search landscape. This is why it is increasingly cautious about how AI-driven search experiences could present significant hurdles for Reddit. This is particularly true if the platform fails to effectively adapt to such changes.
'With Google's aggressive rollout of AI Mode, the shift to AI-based search experiences appears to be accelerating. We believe this is a clear negative for Reddit, and while investor sentiment is increasingly aligning in relation to logged-out user growth, we fear there may also be underappreciated implications for logged-in users and revenue growth. With likely limited offsetting benefits from the seemingly improving tariff situation, we reiterate our Sell rating and $75 PT.'
Overall, RDDT ranks 8th on our list of AI stocks on latest news and ratings. While we acknowledge the potential of RDDT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than RDDT and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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