Needham & Company, via analyst Laura Martin, rolled out an exciting potential future for social media stock Reddit (NYSE:RDDT). In fact, Martin’s projections looked for continued growth from here thanks to several key factors. Investors, however, weren’t buying it, and they weren’t buying in, either, sending shares plunging over 5% in Thursday afternoon’s trading.
Martin offered up some tangible benefit with this projection, hiking the price target from $63 per share to $75, and brought in a slate of reasons for the gain. Martin noted the recent deal with Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and another major deal with OpenAI that would bring in about $400 million in total revenue.
In fact, Martin looked for pretty much every player in artificial intelligence (AI) right now to turn to Reddit as a means to augment large language models. Since Reddit’s primary stock in trade is giving people a forum to talk about pretty much any hobby, interest, or random fascination they want, there’s a lot of conversation going on in there at any given time, which makes it fantastic fodder for AI developers.
Unexpected Benefits
Reddit is also proving a powerhouse in another unlikely department: travel tips. Social media is proving a winner as a tourism planning aid; 39% of travelers turn to social media to get inspiration for new destinations, according to the American Express Global Travel Trends Report. And with several travel-themed Reddit sections, it’s a winner for those looking to travel and get the most out of their experience.
Is RDDT Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on RDDT stock based on nine Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 25.43% rally in its share price over the past year, the average RDDT price target of $60.20 per share implies 5.84% upside potential.
