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Can Reddit (RDDT) Sustain Its Momentum? Needham Thinks So

Reddit, Inc. (NYSE:RDDT) is one of the 10 Trending AI Stocks According to Analysts. Reddit has recently emerged as Needham’s Top Pick for 2026. On February 9, the firm’s analyst Laura Martin reiterated a Buy rating on the stock with a $300.00 price target. RDDT’s Top Pick ranking is supported by execution excellence, rapid margin expansion, and deep community moat.

The company reported its fourth-quarter 2025 financial results last week, posting revenues of $725.6 million for Q4 2025, a 70% year-over-year increase and beating Needham’s estimate by 9%.

Its adjusted EBITDA reached $327 million, up 112% year-over-year and 16% above analyst’s expectations. Non-GAAP earnings per share came in at $1.72, a 99% year-over-year increase and exceeding the firm’s estimate by 18%.

The 70% rise in revenues, the firm highlighted, were driven by 75% year-over-year ad revenue growth, with average revenue per user (ARPU) up 44% and user growth of 18%.

It has highlighted Reddit as its top pick for 2026 based on the platform’s strategic position with “100% human-created content.” This is a factor that becomes more valuable and differentiated as AI language models proliferate.

Needham also acknowledged Reddit’s “execution excellence” with over 60% revenue growth for the past six quarters.

“Our Take RDDT is our top pick for 2026, based on: Strategic position with 100% human-created content, which becomes more differentiated and valuable as LLM bots multiply; Execution excellence, with >60% rev growth for the past 6 quarters, ad revs up 75% in 4Q25, optionality upside from LLM licensing revs and rapid margin expansion, and, Difficulty in replicating a human community like RDDT today, creates a deep moat.”

Reddit, Inc. (NYSE:RDDT) is a social media platform that leverages AI to strengthen search functionality and improve user engagement.

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 this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

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