$RDDT
MediumInvestment Thesis
Reddit is a high-growth money printer that algorithms incorrectly bundle with AI-disrupted social media. Q1 2026: $663M revenue (+69% Y/Y), 91.5% gross margins, $204M GAAP net income. Still down 28% YTD after blowout earnings. Reddit's data licensing for AI training + growing ad platform creates durable FCF. Long from ~$140-148.
Catalysts
- Q1 2026: 69% revenue growth, 91.5% gross margin, $0.6B+ revenue run rate
- AI data licensing — unique community-generated training data premium
- Q2 guidance: $715-725M revenue with 40%+ EBITDA margin
- Algorithm mislabels RDDT with Snap/Meta — fundamentals will reprice
Risks
- AI-generated content could commoditize Reddit's unique data moat
- Valuation re-rating takes time after down-28% YTD start
From the Feed (3 signals)
Two most viral stories on $RDDT: 1. Turning $252K -> $7.7M with $AMD 2. Turning $167K -> $2.2M with $RKLB. These are likely true, since it's possible to find these niche leaders to change your life. What matters is: finding rare gems / leaders in a niche field, having enough concentration for it to matter, having enough conviction to sit through volatility, letting the thesis play out (even if it's across multiple years). You've already seen me do it multiple times with photonics like $AXTI, $IQE, $SIVE, and others.
Wow, $RDDT just posted an absolute blowout quarter. -> $663M revenue (69% growth Y/Y) vs. ~$608M consensus. -> $1.01 EPS reported vs. $0.6 consensus (68.3% beat). -> 91.5% gross margins. -> Q1 GAAP net income was $204M. Next quarter they projected, $715M to $725M revenue growth with $285 million to $295 million adjusted EBITDA. Reddit looks like a literal, high growth money printer.
Finally vindicated on my $RDDT long 6 weeks later. Funny thing is… It's still down 28% YTD after that absolute blowout of quarter earnings and projections. Personally think it heads back to $200+ over time (repricing doesn't happen in a day) since it's a growing money printer.