Reddit Inc. (RDDT) saw its stock plummet 5.03% in Tuesday's intraday trading session, as investors grew concerned about the company's lofty valuation and potential competition in the artificial intelligence (AI) data licensing space.
While Reddit has carved out a niche for itself by licensing user data from its online forums to companies looking to train their AI models, the news article highlights that the company's stock has become "pricey," trading at a price-to-sales ratio of 19.1, near all-time highs.
Additionally, the article suggests that Reddit's AI data licensing business model may face increasing competition as more companies explore alternative sources of data for training their AI models. This could potentially limit Reddit's ability to command higher prices for its data over the long term.
Comments