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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. 
Key Points - 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, reigniting a rally that had flatlined earlier in the fall. At a time when major social media rivals like Meta Platforms Inc. (NASDAQ: META) — and even alternatives such as Pinterest Inc. (NYSE: PINS) — have lagged or declined this year, Reddit appears to be heating up. While everyone panicked, these coins saw 1,100% in 2 days
Bitcoin down. Altcoins down harder. Many investors are either panic selling or frozen on the sidelines. But these two are doing something different. Click here to see more. What might 2026 have in store for the popular aggregation site, and will it remain the growth stock to beat? A closer look at user engagement, advertising momentum, and capacity for further revenue growth highlights Reddit's potential going forward. User Engagement Fuels Potential Growth One of the brightest spots for Reddit this year has been its strong engagement gains. The company finished 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 one of its platforms within 24 hours. That figure rose roughly 20% year-over-year (YOY), a similar increase to the gain in weekly active uniques (WAUQ). International DAUQ growth was even stronger, at about 31% YOY, driven by gains in markets such as France, Brazil, and India. Reddit's ad-driven business depends on a large and engaged user base; DAUQ and WAUQ growth strengthen its appeal to advertisers, who account for the majority of the company's revenue. An underused revenue opportunity is monetizing its data. With roughly 3.8 billion site visits in September alone, Reddit holds troves of user data that could become increasingly valuable amid the continued AI boom. Revenue and Earnings Climb, But ARPU Trails Competitors With more users engaging its platform, Reddit's top line has surged. In the latest earnings, revenue reached $585 million—up more than two-thirds year over year. International revenue was particularly strong, rising 74% YOY. Earnings per share (EPS) rose roughly 400% as both the top and bottom lines beat analyst expectations. Guidance for the final quarter put revenue between $655 million and $665 million. Average revenue per user (ARPU) was $5.04 in the last quarter, a 41% YOY improvement but still well below many competitors—Meta's ARPU, for example, is roughly three times higher. Improving ARPU will require more than user growth alone. Reddit can raise ARPU by better leveraging its unique content and community engagement, and by expanding tools such as auto-translation and indexing features—capabilities that are especially attractive to advertisers seeking diverse, active 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 uncertain—based on a consensus price target of $230.28, Reddit is approaching the level analysts currently expect it could reach. A key factor for future price appreciation is how Reddit navigates AI. So far, the company has limited AI-facing features for users, keeping the platform focused on human-generated content. That human-first experience has broadened Reddit's appeal. If the company can maintain a balance of robust user content and practical tools while preserving what attracts its community, Reddit's stock could continue to appreciate into 2026 and beyond.
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