Reddit (RDDT) and Alphabet (GOOGL) are prominent players in digital advertising. RDDT is a rising social media platform focusing on community-driven ads, while GOOGL dominates global search and digital ad markets. The global digital advertising market is projected to grow to $2,114.41 million by 2034, benefiting both companies.

Reddit’s user-friendly features and AI tools have driven ad revenue growth, with a 74% increase in advertising revenues in Q3 2025. RDDT reported 116 million daily active users and 444 million weekly active users, with ARPU increasing by 41% to $5.04. The recent beta launch of Max campaigns shows promising results, with up to 27% more conversions and lower costs.

Alphabet’s advertising revenue rose by 12.6% in Q3 2025, with Google Services driving growth in Search and YouTube. AI-powered advertising products like AI Max are expanding opportunities for advertisers. The company’s focus on AI in Search is expected to boost advertising revenues further.

Despite both companies performing well, Reddit and Alphabet stocks are currently overvalued. RDDT shares have a higher forward 12-month Price/Sales ratio compared to GOOGL. Earnings estimates for RDDT and GOOGL show significant growth potential, with a 170.57% increase for RDDT and a 31.59% increase for GOOGL in 2025.

Alphabet offers greater upside potential due to its AI-powered search capabilities and investments in cloud computing. Reddit’s prospects are promising with an expanding advertising business and improved user experience, but face challenges from macroeconomic uncertainties and stiff competition. Alphabet has a Zacks Rank #3 (Hold), while Reddit has a Zacks Rank #4 (Sell).

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Read more at Nasdaq: RDDT vs. GOOGL: Which Digital Advertising Stock Has an Edge Now?