"Reddit ( RDDT) is getting a lot of attention, but not all of it is positive. Reddit saw strong profitability in 2025, but market sentiment signals a "show me" mentality. Its growth gives investors optimism, but tech expectations leave tiny room for error. Still, a recent SEC Form 4 filing shows one executive recently plowed millions of dollars into Reddit's stock."
"Analysts are focused on Reddit's "human" conversations, like the threads you often see, and are using them to train AI models. This allowed the company to reach a 92% gross margin, but despite these metrics, investors boggled down over "logged-out" user growth versus "logged-in" monetization. Reddit has been licensing its 20 years' worth of human conversation, yes, including those "rage bait" threads."
Reddit reported Q4 2025 revenue of $726 million, a 70% year-over-year increase, and full-year revenue of $2.2 billion, driven by a 75% rise in digital advertising. The company reached a 92% gross margin and monetizes 20 years of user conversations through data licensing to train AI models. Investors remain concerned about logged-out user growth relative to logged-in monetization, producing market skepticism and a "show me" mentality. A SEC Form 4 shows director Sarah Farrell purchased $7.5 million in shares, signaling executive confidence. Reddit's community content ranges from chaotic anonymous threads to hobbyist discussions, positioning the platform as a distinct data engine.
Read at TheStreet
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