Reddit Stock Jumps 14% After Partnering with OpenAI

Shortly after announcing its partnership with OpenAI, Reddit Inc. (NYSE: RDDT) saw a significant boost in its stock price. The stock, which had been declining since May 16, rebounded quickly. According to Google Finance, it recovered from a 5.5% dip at market close, climbing to $64.22 in after-hours trading.

This marks the second major rise in Reddit’s stock recently. Earlier this month, the company’s quarterly financial report for Q1 2024 showed record-breaking user traffic and increasing revenue, which led to a 13% stock surge. In March, RDDT shares jumped 48% amid rumors of a potential NYSE listing.

Key Points:

Stock Performance: Reddit’s stock price rose to $64.22 after the announcement.
Previous Gains: The stock surged 13% following a strong Q1 earnings report and 48% in March due to NYSE listing speculation.
Overall Growth: In the last month, Reddit shares have increased by about 35%.

These results reflect growing investor confidence and enthusiasm for Reddit’s recent developments, particularly following its initial public offering (IPO) in March.

Reddit Partners with OpenAI for Advertising, Boosts Stock

Reddit announced on Thursday that it has partnered with OpenAI for advertising, contributing to a significant rise in RDDT stock. This decision follows Reddit’s report of higher-than-expected advertising revenue of $222.7 million, surprising analysts at Bank of America.

Key Points:

Revenue Growth: Advertising revenue increased by 39% over the previous year.

First-Quarter Revenue: Total revenue for Q1 2024 was $243 million, with advertising as the major contributor, reflecting a 48% year-over-year increase.

OpenAI will introduce new AI-powered features for Reddit users and moderators to enhance engagement. The collaboration aims to leverage AI models for deeper insights from platform data.

Earlier in February, Reddit partnered with Google to improve AI model training efficiency, with Google reportedly spending $60 million on Reddit’s data API.

This partnership reflects Reddit’s strategy to innovate and grow its advertising capabilities.

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Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.