Reddit (RDDT) stock has extended gains in recent sessions after the social media platform reported its fifth consecutive profitable quarter since going public.
Reddit earned $0.80 on a per-share basis in its third financial quarter on a better-than-expected $585 million in revenue, which translates to 68% growth on a year-over-year basis.
Despite post-earnings gains, Reddit shares are down more than 20% versus their year-to-date high.
Reddit’s position as the third most visited website in the U.S. has strengthened its value proposition to advertisers and data licensing partners in 2025.
The company’s artificial intelligence (AI) partnerships with Google (GOOGL) and OpenAI have improved its monetization potential and positioned it as a critical training ground for next-gen AI models as well.
That helped Reddit record a 74% year-over-year increase in ad revenue and a whopping 41% growth in average revenue per user (ARPU) for its third quarter on Oct. 30.
RDDT stock is being cheered also because the NYSE-listed firm’s daily active users (DAUs) have experienced remarkable growth, reaching 116 million users.
In fiscal Q3, international user growth came in at a particularly exciting 31% following successful implementation of translation capabilities across 30 languages.
Options traders are convinced that RDDT shares will push further up through the remainder of this year with the put/call ratio for both the near and medium term skewed majorly to the upside.
According to Barchart, contracts expiring Jan. 16 indicate potential for a continued stock price increase to about $253 while the expected move through the end of next week is 9.39% as well, which may see Reddit stock trading at roughly $229 by Nov. 14.
Note that the social media company is currently trading a little below its 50-day moving average (MA) at about $224. A break above that level could also boost bullish momentum into the end of 2025.
Reddit shares are worth buying today also because they’ve returned nearly 18% in November over the past four years and a little over 16% in December.
Wall Street analysts also recommend sticking with RDDT stock for the long term.