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This Month's Featured Article TL;DR: Why Reddit is the New Growth Stock to BeatWritten by Nathan Reiff. Date Posted: 12/19/2025. 
Quick Look - 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, up about 37% in 2025 after rallying again following a flatline earlier in the fall. The online content-sharing platform is showing signs of rapid growth, with its user base, earnings and engagement features all expanding quickly. While major social media rivals like Meta Platforms Inc. (NASDAQ: META) and even alternatives such as Pinterest Inc. (NYSE: PINS) have failed to outperform the market or have declined this year, Reddit appears to be heating up. Elon Musk's Starlink project is generating major speculation ahead of a potential IPO that some analysts believe could reach a historic $100 billion valuation. According to James Altucher, there may be a smart "backdoor" way for everyday investors to position ahead of that event without needing traditional IPO access — and he says it can be done for under $100. He's also sharing a free ticker tied to this trend for anyone who wants to take a closer look. Click here to learn more 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 the capacity for further revenue gains sheds light on Reddit's potential going forward. User Engagement Fuels Potential Growth One of the brightest spots for Reddit this year has been its engagement gains. The company finished the third quarter with an impressive 116 million daily active uniques (DAUQ) — users who visit reddit.com, open a related app, or otherwise engage with the platform within a 24-hour period. That figure rose roughly 20% year-over-year (YOY), a similar increase to growth in weekly active uniques (WAUQ). International DAUQ growth reached about 31% YOY, outpacing overall engagement gains thanks to strong adoption in markets such as France, Brazil and India. Both DAUQ and WAUQ growth underpin Reddit's business: a larger, more engaged user base increases the platform's appeal to advertisers, who account for the majority of its sales. One underutilized revenue opportunity is monetizing Reddit's data. With roughly 3.8 billion site visits in September alone, the company sits on a valuable trove of user behavior and content signals — especially relevant as interest in AI-driven insights grows. Revenue and Earnings Climb, But ARPU Trails Competitors As engagement has expanded, Reddit's revenue has surged. In the latest earnings, revenue reached $585 million, up more than two-thirds YOY. International revenue was particularly strong, rising 74% YOY. Earnings per share (EPS) increased roughly 400% over the same period, as both top and bottom lines beat analyst expectations. Guidance for the final quarter was solid, with revenue projected between $655 million and $665 million. Average revenue per user (ARPU) was $5.04 in the most recent quarter, up about 41% YOY but still materially lower than many rivals (Meta's ARPU, for example, is roughly three times higher). There is clear room to raise ARPU, but that will require more than user growth alone. Reddit can boost ARPU by better leveraging its distinctive content, active communities and features such as auto-translation and content indexing — capabilities that are attractive to advertisers seeking diverse, engaged audiences. AI and Human Content Balance Key to 2026 Outlook Analysts are generally optimistic about Reddit heading into the new year, with 18 out of 29 assigning it a Buy or equivalent rating. After its year-end rally, short-term upside is unclear — with a consensus price target of $230.28, Reddit is approaching the level analysts expect. Key to further price appreciation will be how Reddit navigates AI. So far, the company has limited visible AI features for users, and its emphasis on human-generated content has helped broaden its appeal. If Reddit can maintain a compelling balance of human-driven content and useful tools while continuing to monetize effectively, it could continue to appreciate into 2026 and beyond.
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