6. Reddit (NYSE:RDDT)
Number of Hedge Fund Investors: 70
Reddit (NYSE:RDDT) stock has real long-term growth catalysts that most investors are missing. The company is not just a social media platform anymore. It’s become a data goldmine. Millions of users share genuine personal takes and stories on Reddit every single day. That’s exactly what AI companies need and are willing to pay big money for.
In Q1 2026, Reddit (NYSE:RDDT) revenue jumped 69% year over year. Advertising revenue grew even faster at 74%, while daily active users reached 126.8 million, up 17%. This is serious growth across the board.
The AI licensing deals are where the real money shows up. Google signed a $60 million per year deal with Reddit. OpenAI signed around $70 million per year. Both companies get access to Reddit’s real-time data API to train their AI models and improve their answers. Total licensing value is over $200 million per year. Both deals renew in 2027, which is a major catalyst. As AI labs compete for high-quality human discussion data, Reddit’s negotiating power increases. The company is pushing for dynamic pricing instead of flat fees because every variable has changed since those original deals were signed.
Reddit (NYSE:RDDT) is monetizing smartly, too. Average revenue per user sits at $5.23 globally. In the US, ARPU hit $9.63. That already beats Pinterest at $7.12 and Snapchat at $9.23. The only player ahead is Meta at $15.66, and Reddit can keep climbing toward that without reaching it. There’s still room to add more ad frequency, improve targeting, and monetize search and video features that barely make money yet.
The data scarcity problem for AI is real. High-quality training data ran out about a year ago. Reddit generates the equivalent of all of Wikipedia’s content every single month. Twitter shut down its free API. Stack Overflow partnered with Google. Reddit is one of the few scalable sources of organic human discussion left. AI companies have no choice but to pay up.
Carillon Eagle Mid Cap Growth Fund stated the following regarding Reddit, Inc. (NYSE:RDDT) in its Q1 2026 investor letter:
“Reddit, Inc. (NYSE:RDDT) is an online community platform where users share, discuss, and engage with content across a wide range of topics. The company posted solid revenue growth and profitability, while the closely watched metric of logged-in user growth was somewhat disappointing. Additional uncertainty around upcoming large language model (LLM) data-licensing renewals also pressured sentiment. The company authorized a stock buyback and provides an appealing audience for advertisers, as roughly half of its users are not active on other social media platforms.”
While we acknowledge the potential of RDDT to grow, 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 the cheapest AI stock.
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