Jim Cramer Highlights Reddit’s Solid AI Potential

Reddit, Inc. (NYSE:RDDT) is one of the stocks related to the AI space that Jim Cramer discussed. Cramer noted that many AI companies rely on the company for data, as he stated:

“Who else can make a fortune from AI without much upfront investment? Here’s when you haven’t thought about it all, and it’s Reddit… Not only did Reddit put up nearly 70% revenue growth, their margins have soared. They had a 91% gross margin, 40% adjusted EBITDA margin. That’s very impressive for a company that was barely profitable when it came public; a lot of people felt it would never be profitable. There’s a reason the stock jumped 7.5% last Friday, though it did give back a bit of that today.

The other number that stood out to me… on Reddit’s report was the company’s capital expenditures figures came in at 2.1 million in the third quarter… See, Reddit’s partnering with the chatbots to license its data because that data is essential for training generative AI models. Keep that word in mind. Companies like OpenAI and Google already pay Reddit to license its data, and though this is still a relatively small portion of the business, I think it can grow very big over time. Why? Because many of the other generative AI companies are allegedly using Reddit’s data without paying them a dime… Keep in mind, most of these chatbots rely on Wikipedia and Reddit.”

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Reddit, Inc. (NYSE:RDDT) runs an online platform that hosts communities where users connect over shared interests, exchange ideas, and share content such as posts, images, and videos.

While we acknowledge the risk and potential of RDDT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RDDT and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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