RDDT Stock Jumps on Cannes Lions—But Is It Enough to Shift Reddit Trend?

Quick overview

Reddit’s stock (NASDAQ: RDDT) has seen wild swings since its IPO, soaring to massive highs before facing harsh corrections. New AI-powered advertising tools could offer a fresh catalyst—but technical resistance still weighs on its path forward.

From IPO Euphoria to Post-Earnings Slump

Reddit stock has had a dramatic journey since its March 2024 IPO, which was priced at $34. The price skyrocketed over the following months, peaking at $230 in early February—a gain of nearly 680%. This surge was largely fueled by optimism over Reddit’s data monetization potential and broader retail interest.

RDDT Stock Chart Daily – The 20 SMA Stopped the Jump

However, the bullish momentum faded swiftly after the company released its Q4 2024 earnings. Despite beating on profitability, user growth lagged expectations, and shares plunged 15% in after-hours trading, beginning a steady decline that saw the stock nearly halve from its highs.

AI Advertising Tools Announced at Cannes Lions Festival

Reddit is now looking to reignite interest with a strategic pivot toward AI-powered advertising tools. At the Cannes Lions International Festival of Creativity, the company announced two new alpha-stage products:

1. Reddit Community Intelligence

• Helps marketers identify cultural trends, gather sentiment data, and incorporate Reddit user comments directly into ad campaigns.

      2. Conversation Summary Add-ons (Alpha)

• Allows brands to display curated, positive Reddit commentary beneath their ad creatives.

These tools aim to open Reddit’s rich discussion ecosystem to advertisers, offering real-time insights and boosting brand engagement. As Reddit described it, the platform now enables marketers to “validate creative concepts, monitor brand health, and identify cultural insights” at scale.

Stock Reacts with Gap-Up but Faces Resistance

Following the AI announcement, RDDT stock gapped up from $126.19 to $133.79 at the open, eventually climbing to an intraday high of $144.88 (+15%). However, gains were pared back by resistance at the 20-day Simple Moving Average (SMA), with the price pulling back to $135 (+7% on the day).

The 20-day SMA at $142 is proving to be a key technical barrier. Unless bulls can push RDDT convincingly above this level, short-term momentum may remain capped. The broader trend is still bearish, with Reddit shares down nearly 25% year-to-date, despite the recent bounce.

Conclusion: A Promising Shift, But Caution Still Warranted

Reddit’s foray into AI-driven advertising offers a promising new revenue stream and an attempt to reframe its platform as an essential tool for cultural and brand analysis. But despite the upbeat innovation, traders remain cautious as growth expectations recalibrate and technical indicators signal unresolved downside pressure.

A sustained break above the 20-day SMA would be a more convincing signal that RDDT is ready to resume a bullish trend. Until then, Reddit remains a stock caught between transformation hopes and technical headwinds.

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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