From Nasdaq: 2024-05-17 09:53:00

Reddit shares surged 11.74% in after-hours trading after announcing a partnership with Microsoft-backed OpenAI. The deal will bring Reddit content to OpenAI’s products and help Reddit integrate new AI features. Reddit’s data is valuable for training large language models, attracting significant investments in the AI sector.

OpenAI and Anthropic are facing competition from Microsoft, Amazon, and Google, who plan to build their own large language models. Reddit’s deal with Google for training LLMs has been beneficial. The company is experiencing revenue growth, driven by strong ad revenue and data licensing deals, positioning it for future success.

Reddit’s user-friendly improvements, ad revenue growth, AI investments, and platform monetization plans contribute to its prospects. Partnerships with businesses like Taco Bell and Wendy’s for AI-powered insights point to ongoing growth. The company aims to grow revenues faster than costs, making it attractive for investors.

A research chief names Reddit as a top stock pick with potential for significant growth. The company targets younger audiences and generated nearly $1 billion in revenue last quarter. Reddit’s strategic focus on user engagement and monetization, along with AI advancements, positions it well for future success.



Read more at Nasdaq: Does Reddit’s (RDDT) OpenAI Partnership Make It Worth Buying?