RDDT is trending again today. adding fuel to our already bullish outlook.

We officially entered a bullish position before Thanksgiving when the stock pulled back on internal stakeholder headlines, when the stock was trading around $143.

Since then it's rallied as much as +25% higher, popping this morning after a key product update that leverages AI to answer user queries and an upgrade from Morgan Stanley.

Analysts cited Reddit’s strong engagement and advertising pipeline as key drivers of its future growth, flagging the platform’s potential to outpace its peers in user engagement, time spent, and advertising revenue growth.

We've been tracking Reddit's advertising prowess for some time now -- just look at the outsized growth in visits to its web platform vs. other more established peers.

Enhancements to its ad platform include:

• Keyword Targeting and Audience Expansion: Reddit allows advertisers to position ads alongside specific keywords across feeds and conversations. This ensures ads appear in highly relevant contexts, such as placing a gaming laptop ad next to discussions about "best budget gaming rigs" in r/PCGaming. The AI-driven audience expansion further amplifies campaigns by identifying users likely to engage with similar topics. For example, it could target users in subreddits like r/GamingDeals who frequently interact with posts about hardware upgrades. This tailored approach boosts ad relevance and effectiveness, making Reddit a stronger competitor to platforms like Google and Meta.
• Ad Creation Tools: Smart Headlines leverage AI to craft ad copy that resonates with Reddit’s unique user base, such as suggesting "Stay Ahead in Tech with These Top Laptops" for a campaign targeting r/technology. The Creative Asset Cropper simplifies visual optimization by adjusting images for Reddit’s ad formats, enabling brands like a sneaker company to showcase clear product shots in both mobile and desktop layouts. These tools reduce creative friction, ensuring advertisers can quickly tailor content to Reddit’s communities while maximizing engagement.

To give scale for Reddit's growth opportunity in advertising, RDDT posted Q3 advertising revenue of $315.1 million. This is about a third of the revenue Pinterest generates from ads. And a drop in the bucket vs. META's $40 billion.

But advertising is just the tip of the iceberg when it comes to Reddit's growth prospects. The company is sitting on a treasure trove of real human language -- priceless training material for generative AI and large language models.

Reddit's data licensing revenue segment grew by +547% YoY in Q3 to $33.2 million, bolstered by partnerships with companies like Google and OpenAI, which utilize Reddit's extensive user-generated content to train their AI models.

Lastly, Reddit is leveraging machine learning to expand its global user base. Previously the platfrom was heavily tilted toward english speakers (and users). By using machine translation, Reddit drove 4x daily active users QoQ, with goals to bring its content to +30 countries in 2025.

Data shows worldwide platform visits up by +34% YoY.

Bottom line: Reddit is a relatively new IPO but unlike other names we've seen, doesn't...

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