Reddit stock rises after first quarterly report on higher-than-expected earnings forecast, AI hopes

Reddit's stock rose by 5% after its first quarterly earnings report exceeded expectations with a forecast of $240 million to $255 million in revenue for the next quarter, surpassing Wall Street's prediction of $228 million. The company also anticipates an adjusted EBITDA of $0 to $15 million, against an expected $13 million loss. This positive outlook is bolstered by a 9% increase in daily active users to 82.7 million.

Analysts remain optimistic about Reddit's future, particularly regarding its potential in artificial intelligence through data licensing for training large language models. Reddit CEO Steve Huffman highlighted the platform's extensive database as a valuable asset. Wall Street analysts have adjusted their revenue estimates upward and maintained positive ratings, with predictions of continued strong performance driven by AI advancements.