Reddit shares advanced sharply during Tuesday's trading session, rising approximately 6.5% to $151.01, significantly outpacing the broader market's modest gains. The rally followed bullish analyst commentary from two major firms, even as some indicators pointed to potential weakness in user engagement.
Analyst Conviction Amid Mixed Signals
Citizens maintained its "Market Outperform" rating and $300 price target but noted softer third-party engagement trends. The firm reported that global time spent on the platform has declined year-over-year for six consecutive months, with U.S. time spent down 10.5% in January. However, global visits increased 14.4% during the same period. Separately, Needham analyst Laura Martin reiterated a "Buy" rating and $300 target, highlighting Reddit's "100% human-created content" and calling the company a top pick for 2026.
Recent Financial Performance
The social media company recently reported fourth-quarter revenue of $726 million and announced a new share repurchase program authorizing up to $1 billion in buybacks. CEO Steve Huffman emphasized the company's transition into "the next era of Reddit," focusing on execution, global expansion, and product improvements aimed at daily utility.
Investor attention has shifted from whether Reddit beat quarterly expectations to the sustainability of user growth, the trajectory of core advertising revenue, and how the company balances expansion with margin preservation. Goldman Sachs, which maintains a Neutral rating, suggested these factors will likely remain points of debate among investors.
Broader Market Context
The broader equity market showed modest strength, with the SPDR S&P 500 ETF gaining about 0.2%. Among related technology and social media names, Pinterest rose approximately 2.8% and Snap gained around 3.0%, while Meta Platforms declined about 0.9%.
Traders are closely monitoring upcoming economic releases for signals on interest rate policy. The January employment report is scheduled for Wednesday, February 11, followed by the Consumer Price Index inflation data on Friday, February 13. These indicators could influence market sentiment toward growth-sensitive assets like Reddit.
