Reddit Stock Gains Ground With AI License Opportunities
Reddit surged early this week thanks to AI excitement
Despite volatile swings, Reddit stock is still up 44% from its IPO listing price. After an explosive initial public offering (IPO) last week, Reddit (NYSE: RDDT) stock closed out this week's trading with more gains. The social media company's share price ended the shortened trading week up 7.2% from last Friday's market close.
AI License Opportunities Driving Growth
In the filing, Reddit noted that it was looking to make data licensing a significant new sales pillar, leading to lucrative contracts worth $203 million over the next few years. The move to license data for AI training could significantly improve the economics of the business. This drove strong momentum in early week trading.
Analyst Insights and Bearish Factors
New Street initiated coverage on Reddit with a neutral rating and a price target of $54 per share. While excitement over AI boosted the stock, some analysts cited that potential benefits were already priced in. Hedgeye analyst Andrew Freedman mentioned Reddit as a short candidate, triggering sell-offs. Insider selling further impacted stock performance.
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