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What you need to know
- Reddit’s shares reached a new record Monday, after Morgan Stanley analysts upgraded its stock and highlighted the ways Reddit can grow by 2025.
- Reddit's user base has grown faster than the analysts expected this year, with avenues to continue growing, including a Google partnership directing searches to Reddit links.
- As Reddit's user base grows and it develops new advertising tools, the platform could become a more attractive advertising destination, the analysts wrote.
Reddit’s (RDDT), shares soared to a new record Monday, after Morgan Stanley analysts upgraded the stock citing Reddit’s “multiple levers” Potential growth for 2025.
According to analysts, “have been wrong on the sidelines” They are excited about the growth of this stock since its initial public offer (IPO) in early 2018. They raised their target price to $200 and upgraded the shares to “overweight” The following is a list of the most recent and relevant articles. “equal-weight,” Reddit is showcasing new tools and product that will help it grow in terms of users and revenue.
Reddit's User Base, Ad Technology Expected to Continue Growing
“In effect, RDDT is shipping engagement and ad products rapidly and has multiple levers to drive outsized growth,” The analysts wrote on Sunday.
Reddit DAU’s (daily active users) grew about 20% faster that Morgan Stanley’s projections. Analysts expect Reddit to continue growing as users spend more time on the platform. The analysts cited features such as improved search, a partnership between Alphabet (GOOGL), Google and Reddit to drive more users to Reddit’s links.
Analysts wrote that an increased user base spending more time in Reddit could also increase its appeal to advertisers. That would bring Reddit’s advertising pricing more closely to competitors such as Google or Meta (META). Analysts said that Reddit will also launch several ad products in the coming year with AI and automation features.
Separately, Reddit on Monday announced a new search feature with a trial run of "Reddit Answers." A "limited number of users in the U.S." will be the first to access the AI tool that can answer questions with summaries of Reddit threads on the topic, with popular answers from Reddit commenters highlighted and links for the user to read more into the threads.
Reddit stocks were trading at $168 on Monday, up more than 3% after earlier reversing some gains.
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