Latest news with #JamesCordwell
Yahoo
3 days ago
- Business
- Yahoo
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. 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.
Yahoo
3 days ago
- Business
- Yahoo
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. 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.
Yahoo
01-04-2025
- Business
- Yahoo
Reddit's success may be inextricably tied to Google Search
Reddit has grown since going public last year, but some analysts fear it may be too closely tied to Google. Redburn Atlantic analysts warned Reddit's reliance on Google traffic and logged-out users may limit its long-term value. Reddit's stock has been volatile, affected by Google's algorithm changes and rumors of a Google deal. Reddit is growing quickly, but — like many media companies — it's struggling to separate itself from Google. Wall Street analysts from Redburn Atlantic rated Reddit "sell" on March 17 after saying in a note that the company's "potential, breadth of appeal and thus value as a company are being overstated," according to Bloomberg. James Cordwell and Joseph Barker, analysts for the firm, said that much of Reddit's growth over the past few years has been "misconstrued" because it came from logged-out users as the main driver, with many of those users coming from Google's algorithm, according to the outlet. Reddit CEO Steve Huffman has repeatedly said that people are going to Google more with the intention of ending up on Reddit. But the Redburn analysts say this trend could lead to more logged-out user growth than logged-in user growth. Reddit's daily active users who are logged in to their accounts were up 27% last year, but the same metric was up by 70% for people who were logged out, BI previously reported. "Accelerated user growth has been driven predominantly by logged-out users who arrive on the platform largely via Google Search," the Redburn analysts wrote. "These users are much less valuable to Reddit as they are typically just looking for an answer to a query and thus spend little time on the platform." Cordwell and Barker added that there is "clear evidence" that the boost to traffic from Reddit's recent changes is "hitting a ceiling, with a risk that what Google giveth, it will taketh away," according to Bloomberg. Redburn did not return requests for comment from Business Insider. A spokesperson for Reddit noted that the majority of analysts have maintained their "buy" rating for the company and that the experience for logged-in user has been driven by improvements to the platform. Jen Wong, Reddit's COO, recently described the relationship with Google as "symbiotic." "People are using Google to get to Reddit," she said at the Morgan Stanley Technology, Media, and Telecom Conference in March. "When I view it like this, I don't view it as existential; we have these two sources of traffic. It's not existential for us, but it is some chop that we managed through." Reddit has seen tremendous growth over the past year since going public in March 2024, but its stock has seen some volatility in recent months. On February 12, Reddit's stock dropped more than 15% after Huffman said in an earnings call that a tweak to Google's algorithm caused "volatility" in site traffic. He added that "traffic from search has recovered so far in Q1, and we've regained momentum. What happened wasn't unusual." On March 17, Reddit's stock jumped again after Reuters published an article that it later retracted, which said Google and Reddit had entered a new partnership. Reuters said in an update that the post was based on outdated information. Reddit users reacted to the post in r/stock, a community where users discuss stocks, market news, and finances. "Wild. There was just like a 10% pump and it instantly dropped back down. Is Wall Street Bets on this stock or something?" one user wrote in a comment about the article. Another user said in the comments they see many Google search results that use Reddit information. The user wrote that it is "insane how Google has basically sold out its Search function to operate as the Reddit search bar." "Most of the time when you Google something now you're either shown a list of Reddit pages or given an AI overview that uses Reddit to write the answer," the user wrote. Read the original article on Business Insider
Yahoo
21-03-2025
- Business
- Yahoo
Why Reddit Stock Is Sinking This Week
Since last Friday, shares of the popular online content forum Reddit (NYSE: RDDT) are trading 14% lower as of 11:38 a.m. ET Thursday. Analysts have grown more bearish on the company's prospects this year, and CEO Steve Huffman sold $15.8 million of stock recently. Reddit's stock has performed extremely well since going public in March of 2024. It exploded from $46 on its first day of trading to a peak of $225 just this February. However, the sell-off has hit it hard. Now trading around $110, the stock is still up nearly 140% since going public. But in recent months, analysts have grown concerned about the company's reliance on Google. Redburn Atlantic analysts James Cordwell and Joseph Barker wrote in a research note earlier this week, "The strong growth of the past 18 months has been predominantly the result of Google changing its search algorithm to favor Reddit, but there is clear evidence that the boost to traffic and visibility from these changes is hitting a ceiling, with a risk that what Google giveth, it will taketh away." Cordwell and Barker have a sell rating on the stock and a $75 price target. Huffman also sold a chunk of stock, although the sales had been planned and he still holds a significant number of shares. Some, like Deutsche Bank analyst Benjamin Black, think concerns about Google and growth are more than priced in now with the stock down significantly since early February. Reddit still trades at 36 times forward earnings, so it's not cheap but much less expensive than it once was. I like the company's platform and think many people find it useful, although monetizing social media platforms is easier said than done. I'm positive on the stock in the long term but think shares will remain volatile in the near term, so understand this before buying. Before you buy stock in Reddit, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Reddit wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $720,291!* Now, it's worth noting Stock Advisor's total average return is 840% — a market-crushing outperformance compared to 165% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 18, 2025 Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why Reddit Stock Is Sinking This Week was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
17-03-2025
- Business
- Yahoo
Google expands Reddit partnership
(Reuters) - Alphabet's Google on Monday expanded its partnership with Reddit amid concerns that the social media platform's user growth relies heavily on traffic from Google Search. Redburn Atlantic analyst James Cordwell initiated coverage on Reddit's stock with a "sell" rating, saying the company's growth in daily active users (DAUs) — a key metric in determining traffic on a web-based platform — is vulnerable to algorithm changes by Google. Google's algorithm change has already started to affect Reddit. It saw a sequential decline of 600,000 users in U.S.-based DAUs arriving on Reddit via Google search in the fourth quarter, Cordwell wrote in a note. Shares of Reddit were down 5.6% in afternoon trading on Monday. The expanded partnership now enables Reddit to use Google's Vertex AI - an AI development platform by Google Cloud that enables its users to build, deploy and scale machine learning models and AI applications - to enhance search on the Reddit platform. Mountain View, California-based Google said it will integrate Reddit content more effectively across its products, making it easier for users to find helpful information. Google will now have access to Reddit's API — a set of rules and protocols that allows different software applications to communicate with each other — for real-time, structured content, improving the accuracy and relevance of displayed information. Cordwell said growth of Reddit's organic users, the ones who log in on the platform to use it more than seeking an answer to a single question, has largely been unchanged over the past six months, signaling there has been little structural changes in the appeal of Reddit. Sign in to access your portfolio
