To The Moon

$Reddit(RDDT)$ 🚀📈🔥 Reddit rips higher: Q2 blowout, AI tailwinds, and a $6.8M call sweep blitz 🔥📈🚀

I’m extremely confident Reddit ($RDDT) just redefined its valuation narrative.

This wasn’t a routine earnings beat; it was a systemic pivot. Reddit’s Q2 results marked the most profitable quarter in its history:

• Revenue: $500M, up 78% YoY

• Net Income: $89M, flipping from a prior loss

• EPS: $0.45, smashing consensus of $0.19

• Daily Active Users: 110M, up 21% YoY

• Gross Margin: 89.73%

Q3 guidance is equally aggressive:

• Revenue projected at $535M to $545M

• Adjusted EBITDA: $185M to $195M, more than double YoY

CEO Steve Huffman emphasized Reddit’s unique strategic moat, noting it is now the “most cited domain for AI training across all models.” That’s not hype; it’s signal dominance.

While the broader market slumped (S&P 500 fell 1.60%, Nasdaq dropped 2.24%), Reddit defied gravity with a 21.1% intraday gain, backed by multi-sigma institutional flow and breakout technicals. Volume hit 27.26M shares, quadrupling the daily average.

📊 Technicals and Momentum

• 4H chart: RDDT exploded through the upper Keltner and Bollinger Bands, completing a multi-week compression breakout

• Price closed at $188.64, up $28.05 (17.47%) on the day

• Indicators:

• RSI(6): 82.19

• RSI(12): 69.20

• MACD: 12.21, crossed bullish

• Weekly chart: Clean breakout over the 5MA, 10MA, 20MA, and 30MA. Price sliced through resistance at $155.08 and $201.78, with eyes on $230.41

• 52-week high: $230.41, low: $49.13

📈 $6.8M Call Sweep Surge: Institutional Order Flow

RDDT saw six large call sweeps on 01Aug25 targeting the $165 strike, expiring the same day (0DTE):

• Largest sweep:

• Time: 10:27:13

• Value: $4.51M

• Spot Price: $188.98

• Contracts: 1896

• Premium/contract: $23.778

• OTM: 12.69% out of the money

All trades were sweeps or blocks, not hedges. One notable block trade of 100 contracts at $24.85 confirmed conviction at the ask. These weren’t retail YOLOs; they were pure directional bets chasing a volatility expansion.

📉 Short Interest Mechanics

• Total short interest: 6.99M shares

• Daily short volume (01Aug25): 5.08M shares

• Short ratio: 18.63%

• NASDAQ short: 1.37M, NYSE short: 3.71M

• Closing price: $188.64

I’m watching for continuation pressure via gamma squeeze potential, especially if RDDT reclaims $192 into next week’s session. Options open interest is building at multiple ITM layers.

🧠 Institutional Analyst Conviction

In just two sessions, seven firms raised their price targets:

• Morgan Stanley: $170 to $230 (+35.29%), Overweight

• Truist: $160 to $225 (+40.63%), Buy

• Needham: $165 to $215 (+30.30%), Buy

• Goldman Sachs: $152 to $212 (+39.47%), Neutral

• Piper Sandler: $150 to $210 (+40.00%), Overweight

• JMP Securities: $180 to $225, Market Outperform

• BofA: $150 to $180, Neutral

Average analyst target: $192.31

Highest: $244, Lowest: $75

Current price: $187.20, just 1.95% below consensus

Expect another wave of price target revisions if Q3 guidance proves sticky.

📅 Catalysts and Insider Moves

• Q2 10-Q filed: 01Aug25

• CFO Andrew Vollero bought 10,000 shares on 31Jul25 (Form 4)

• CTO Christopher Slowe sold 15,930 shares on 24Jul25 (Form 4)

• 8-K filings: 02Jul25 and 31Jul25

• Institutional options flow peaked at $6.8M in 0DTE calls into expiry

📉 Valuation, TAM, and Forward Metrics

• Market Cap: $30B, P/E: 248.44

• Forward Revenue Growth: 21.4% CAGR, vs market 9.2%

• Forward EPS Growth: 37.08% CAGR

• Shareholder return: 170.44% YoY, vs sector avg 26.7%

• Average time on site: 25 to 30 minutes per user daily

• Reddit’s data monetization TAM: $1.4T by 2027, with zero-priced verticals like data licensing, commerce, and social listening still underleveraged

• Price/Sales: ~60x vs SNAP ~10x, reflecting AI valuation premium

• Strategic AI moat: unmatched in signal utility, tied directly to LLMs

📉 Macro Lens and Relative Strength

Reddit printed a 21.1% gain on the same day the S&P dropped 1.60%, Nasdaq 2.24%, and bond yields spiked with the 10Y Treasury at 4.25%. Top names like NVDA (down 3%) and TSLA (down 2%) sold off, yet Reddit gained. That divergence highlights Reddit’s role as an AI-aligned outlier.

🧠 Risk Factors

• Macro softness and ad cycle volatility

• Google infrastructure dependency

• FTC pressure on data licensing rights

• High valuation at current P/S levels

• Possibility of post-earnings mean reversion if momentum fades

But these risks are not thesis-breaking. Reddit is no longer just a forum. It is becoming a data economy engine and real-time AI training pipeline. That transformation is the story.

📌 Short-Term Tactical Setup

I’m targeting a short-term move toward $210 with a stop at $185. Above $192, I’d expect call buyers to return en masse. A break over $201.78 could ignite another round of price target lifts into $230.41.

What’s your take? Can Reddit rewrite its ATH this quarter, or do we need a new upside catalyst from the AI side?

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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