Meta Platforms and Reddit are major players in social media, with over 3.4 billion and 108.1 million daily users respectively. The global social media advertising market is expected to grow to $406.64 billion by 2029, with both companies heavily investing in AI for advertising and user experiences.

Reddit is experiencing strong growth in user engagement and advertising tools, with AI-powered features like Reddit Answers driving content discovery. Revenue expectations for the second quarter of 2025 are between $410 million and $430 million, with investments in AI improving user engagement and feed ranking.

Meta Platforms continues to perform well, with AI integration leading to increased time spent on Facebook and Instagram. The company’s advertising business remains strong, with AI-powered improvements boosting conversion rates. Features like Ads Manager and Business AI are enhancing marketing strategies and user experiences.

Shares of Reddit have decreased by 8.6% year to date, while Meta Platforms shares have increased by 24%. Both companies are considered overvalued, with Meta Platforms trading at a lower Price/Sales ratio than Reddit. Earnings estimates for 2025 show positive growth for Meta Platforms and steady performance for Reddit.

Meta Platforms offers better growth potential with a diverse business model and strong AI implementation. Reddit, while unique, faces challenges in revenue generation and execution. Meta Platforms is currently ranked #3 (Hold) compared to Reddit’s #4 (Sell) by Zacks Investment Research.

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