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Exclusive Story TL;DR: Why Reddit is the New Growth Stock to BeatSubmitted by Nathan Reiff. Posted: 12/19/2025. 
Summary - Reddit's revenue and user base have grown at a fast pace in recent quarters.
- Strong performance internationally has helped to fuel these gains, thanks to add-on features like translation tools and more.
- The company's average revenue per user remains low compared to rivals, suggesting that Reddit could continue to boost its appeal to advertisers going forward.
Reddit Inc. (NYSE: RDDT) is ending the year on a high note, having returned about 37% in 2025 after a rally that had appeared to stall in the fall. The online content-sharing platform is showing signs of rapid expansion: its user base, earnings, and engagement features are all growing quickly. At a time when major social media rivals such as Meta Platforms Inc. (NASDAQ: META) — and even alternatives like Pinterest Inc. (NYSE: PINS) — have underperformed the market or declined this year, Reddit appears to be heating up. A former hedge fund manager known for cutting through market noise is briefly opening access to his flagship trading strategy. In a short demo, he explains how his "One Ticker" approach works — and how readers can access the full service for a year at a steep discount. Watch the brief demo here What might 2026 hold for the popular aggregation site, and will it remain the growth stock to beat? A closer look at user engagement, advertising momentum, and revenue upside helps illuminate Reddit's prospects. User Engagement Fuels Potential Growth One of Reddit's brightest spots this year has been strong engagement gains. The company closed the third quarter with about 116 million daily active uniques (DAUQ) — individual users who visited reddit.com, opened a related app, or otherwise engaged with the platform in a 24-hour period. That was roughly a 20% year-over-year (YOY) increase, a rise mirrored in weekly active uniques (WAUQ). International DAUQ expanded even faster, up roughly 31% YOY, driven by growth in France, Brazil and India. Reddit's business model relies heavily on scale: rising DAUQ and WAUQ give the company more leverage with advertisers, who account for the bulk of revenue. With about 3.8 billion site visits in September alone, Reddit also sits on a large trove of user data that could be monetized further — a valuable asset as demand for AI-driven insights grows. Revenue and Earnings Climb, but ARPU Trails Competitors As engagement rose, Reddit's revenue jumped. In the most recent quarter, revenue reached $585 million, more than two-thirds higher than a year earlier. International revenue was particularly strong, up 74% YOY. Earnings per share climbed roughly 400% as Reddit comfortably beat analyst estimates, and guidance for the final quarter put revenue between $655 million and $665 million. Measured on a per-user basis, average revenue per user (ARPU) was $5.04 in the last quarter, a 41% YOY improvement but still well below many peers (Meta's ARPU, for example, is roughly three times higher). That gap highlights a clear opportunity: Reddit can increase monetization without matching user-growth rates, but it will need more than audience expansion to do so. The company can lift ARPU by better leveraging its distinctive content and community engagement, and by improving advertiser tools such as auto-translation and content indexing — features that are particularly attractive to brands seeking diverse, active audiences. AI and the Human Content Balance Are Key for 2026 Analysts are generally optimistic heading into the new year: 18 of 29 covering the stock assign it a Buy or equivalent rating. After the year-end rally, near-term upside may be limited — the consensus price target is $230.28, a level Reddit is approaching. How Reddit manages AI will be critical to its trajectory. So far the company has been cautious about exposing users to AI-generated content, and that restraint has helped preserve an appeal rooted in human-generated discussion. If Reddit can maintain a compelling mix of authentic community content and useful AI-enhanced tools — while continuing to expand and better monetize its audience — it could sustain further appreciation into 2026. The main challenges to watch are converting that larger audience into higher ARPU and balancing innovation with the community norms that made the platform popular in the first place.
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