Reddit’s $663 million Q1 revenue and $60 million AI data-licensing deals with Google and OpenAI drive shares higher after hours.
Reddit Inc (RDDT) shares surged in after-hours trading after reporting first-quarter revenue of $663 million, up 69% year over year, and earnings of $1.01 per share, exceeding Wall Street estimates. The company also issued second-quarter revenue guidance above analyst expectations, supported by a 74% jump in advertising revenue.
The results followed bullish sentiment from AI-driven analysis, which highlighted Reddit’s growing AI data-licensing business as a key growth driver. Google agreed to pay $60 million annually to use Reddit data for training its Gemini AI models, while OpenAI partnered with Reddit to integrate its content into ChatGPT products. Despite concerns that AI chatbots could reduce user traffic, Reddit’s earnings suggest its business model remains resilient.
Hedge funds tracked by the analysis held Reddit as a top stock pick, with 82 funds owning shares. The company’s strong performance and AI partnerships have positioned it as a potential beneficiary of the AI boom, countering earlier bearish sentiment.