Analyst Explains Why Reddit (RDDT) is a Winner in AI-Based Internet Search Era

Reddit Inc (NYSE:RDDT) is one of the 10 Buzzing Stocks to Watch as AI Trade Makes a Comeback.

Rich Greenfield, Lightshed Partners co-founder, explained in a recent program on CNBC how Reddit (RDDT) can benefit from the changing nature of the internet amid the rise of LLMs and AI search. The analyst believes companies need Reddit because of its extensive human-driven data.

“ChatGPT does not send a lot of traffic to Reddit Inc (NYSE:RDDT). Google actually still does. And yes, it’s been volatile and Google’s making changes with all of their algorithms, but if ChatGPT wants to keep access to Reddit Inc (NYSE:RDDT), and they need Reddit, like the key is Reddit is human information, like real information. When you look at what’s going to happen to the internet with less and less traffic being sent from search engines over to publishers, a lot of these sites that don’t have brand names, like people may still go to CNBC, but there’s a lot of sites on the internet that are going to get crushed by not having the Google funnel of search traffic being driven to them. So, a lot of the internet’s going to get a lot worse. That’s going to make Reddit Inc (NYSE:RDDT) more valuable to search engines as well as to LLM like ChatGPT or Gemini. So, I think they’re going to get paid a lot more money over the course of the next few years.”

Greenfield is right. With about 100 million daily active users, Reddit Inc (NYSE:RDDT) remains one of the fastest-growing social media platforms in the world. While Facebook and Twitter show signs of maturing growth, Reddit Inc (NYSE:RDDT) still has huge upside potential as more and more people flock to Reddit discussion boards for authentic opinions and discussion. User input from millions of people on various topics freely accessible to anyone is Reddit Inc (NYSE:RDDT)’s moat. That’s why companies are flocking to pay money to Reddit to use its data to train their AI models.

Copyright: gyddik / 123RF Stock Photo

Maple Tree Capital stated the following regarding Reddit, Inc. (NYSE:RDDT) in its Q1 2025 investor letter:

“Reddit, Inc. (NYSE:RDDT) is Heartwood’s newest, and smallest, position. We anticipate growing this position in size over the coming quarters and years as the story parallels pretty closely to what we see in Grindr in the Jonagold portfolio. Reddit holds incredibly unique and structured user-generated data, which will be extremely valuable in the AI era. Additionally, their user base spends a ton of time on the app. It is far easier to monetize users if you have users! Reddit has spent decades acquiring a user base and is just at the beginning of their monetization journey. More people visit Reddit every day than they do Netflix. Their balance sheet is clean, but stock-based compensation and dilution are significant. We wrote a little more about Reddit here and expect to share more on our thesis shortly.”

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Disclosure: None. This article is originally published at Insider Monkey.