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Today's Featured Article TL;DR: Why Reddit is the New Growth Stock to BeatSubmitted by Nathan Reiff. First Published: 12/19/2025. 
Key Takeaways - 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 2025 on a high note, having returned about 37% this year after reigniting a rally that had appeared to flatline in the fall. The online content-sharing platform is showing signs of rapid growth: its user base, engagement metrics, and earnings are all expanding quickly. At a time when major social media rivals like Meta Platforms Inc. (NASDAQ: META) — and even smaller alternatives such as Pinterest Inc. (NYSE: PINS) — have struggled to outperform the market, Reddit appears to be heating up. Artificial intelligence is reshaping the economy at an unprecedented pace — creating opportunity for some, while raising serious questions for others.
In a new documentary, one researcher examines how rapid AI adoption is affecting jobs, wealth distribution, and long-term economic stability. The presentation explores both the risks of this transition and how a small group of individuals are preparing for — and benefiting from — the shift. Watch the free documentary here What might 2026 have in store, and will Reddit remain the growth stock to beat? A closer look at user engagement, advertising momentum, and revenue opportunities highlights the company's potential. User Engagement Fuels Potential Growth One of Reddit's brightest spots this year has been strong engagement. The company finished the third quarter with an impressive 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 figure rose roughly 20% year-over-year (YOY), a gain mirrored in weekly active uniques (WAUQ). International DAUQ grew about 31% YOY, outpacing overall engagement gains thanks to notable expansion in France, Brazil, and India. Reddit's business relies on scale, and rising DAUQ and WAUQ help underpin future success. A larger, more engaged audience gives Reddit greater leverage with advertisers, who account for the bulk of the company's revenue. Another largely untapped revenue opportunity is data. With roughly 3.8 billion site visits in September alone, Reddit holds extensive user behavior data that could become increasingly valuable as demand for AI-driven insights grows. Revenue and Earnings Climb, But ARPU Trails Competitors As engagement has grown, so has revenue. In the latest earnings, Reddit reported $585 million in revenue — up more than two-thirds year-over-year. International revenue was particularly strong, rising 74% YOY. Earnings per share (EPS) climbed about 400% as both the top and bottom lines exceeded analyst expectations. 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 most recent quarter, a 41% YOY increase but still well below many peers (Meta's ARPU, for example, is roughly three times higher). Closing that gap will require more than adding users; Reddit must extract more value from each user. The company has avenues to raise ARPU by leveraging its unique content and community engagement, and by rolling out features such as auto-translations and improved indexing — capabilities that are attractive to advertisers seeking diverse, active audiences. AI and Human Content Balance Key to 2026 Outlook Analysts remain generally optimistic about Reddit heading into 2026, with 18 of 29 analysts assigning a Buy or equivalent rating. Following its year-end rally, short-term upside may be limited: the consensus price target is $230.28, a level Reddit is already approaching. A key determinant of future returns will be how Reddit navigates AI. So far the company has limited user-facing AI tools, and its emphasis on human-generated content has helped broaden and retain its audience. If Reddit can maintain a balance between authentic community content and helpful tools — while continuing to expand monetization — it could sustain momentum into 2026 and beyond.
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