$Reddit(RDDT)$ πππ₯ Reddit rips higher: Q2 blowout, AI tailwinds, and a $6.8M call sweep blitz π₯ππ
Iβm extremely confident Reddit ($RDDT) just redefined its valuation narrative.
This wasnβt a routine earnings beat; it was a systemic pivot. Redditβs Q2 results marked the most profitable quarter in its history:
β’ Revenue: $500M, up 78% YoY
β’ Net Income: $89M, flipping from a prior loss
β’ EPS: $0.45, smashing consensus of $0.19
β’ Daily Active Users: 110M, up 21% YoY
β’ Gross Margin: 89.73%
Q3 guidance is equally aggressive:
β’ Revenue projected at $535M to $545M
β’ Adjusted EBITDA: $185M to $195M, more than double YoY
CEO Steve Huffman emphasized Redditβs unique strategic moat, noting it is now the βmost cited domain for AI training across all models.β Thatβs not hype; itβs 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.
π Technicals and Momentum
β’ 4H chart: RDDT exploded through the upper Keltner and Bollinger Bands, completing a multi-week compression breakout
β’ Price closed at $188.64, up $28.05 (17.47%) on the day
β’ Indicators:
β’ RSI(6): 82.19
β’ RSI(12): 69.20
β’ MACD: 12.21, crossed bullish
β’ 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
β’ 52-week high: $230.41, low: $49.13
π $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):
β’ Largest sweep:
β’ Time: 10:27:13
β’ Value: $4.51M
β’ Spot Price: $188.98
β’ Contracts: 1896
β’ Premium/contract: $23.778
β’ 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 werenβt retail YOLOs; they were pure directional bets chasing a volatility expansion.
π Short Interest Mechanics
β’ Total short interest: 6.99M shares
β’ Daily short volume (01Aug25): 5.08M shares
β’ Short ratio: 18.63%
β’ NASDAQ short: 1.37M, NYSE short: 3.71M
β’ Closing price: $188.64
Iβm watching for continuation pressure via gamma squeeze potential, especially if RDDT reclaims $192 into next weekβs session. Options open interest is building at multiple ITM layers.
π§ Institutional Analyst Conviction
In just two sessions, seven firms raised their price targets:
β’ Morgan Stanley: $170 to $230 (+35.29%), Overweight
β’ Truist: $160 to $225 (+40.63%), Buy
β’ Needham: $165 to $215 (+30.30%), Buy
β’ Goldman Sachs: $152 to $212 (+39.47%), Neutral
β’ Piper Sandler: $150 to $210 (+40.00%), Overweight
β’ JMP Securities: $180 to $225, Market Outperform
β’ 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.
π Catalysts and Insider Moves
β’ Q2 10-Q filed: 01Aug25
β’ CFO Andrew Vollero bought 10,000 shares on 31Jul25 (Form 4)
β’ CTO Christopher Slowe sold 15,930 shares on 24Jul25 (Form 4)
β’ 8-K filings: 02Jul25 and 31Jul25
β’ Institutional options flow peaked at $6.8M in 0DTE calls into expiry
π Valuation, TAM, and Forward Metrics
β’ Market Cap: $30B, P/E: 248.44
β’ Forward Revenue Growth: 21.4% CAGR, vs market 9.2%
β’ Forward EPS Growth: 37.08% CAGR
β’ Shareholder return: 170.44% YoY, vs sector avg 26.7%
β’ Average time on site: 25 to 30 minutes per user daily
β’ Redditβs data monetization TAM: $1.4T by 2027, with zero-priced verticals like data licensing, commerce, and social listening still underleveraged
β’ Price/Sales: ~60x vs SNAP ~10x, reflecting AI valuation premium
β’ Strategic AI moat: unmatched in signal utility, tied directly to LLMs
π 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 Redditβs role as an AI-aligned outlier.
π§ Risk Factors
β’ Macro softness and ad cycle volatility
β’ Google infrastructure dependency
β’ FTC pressure on data licensing rights
β’ High valuation at current P/S levels
β’ 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.
π Short-Term Tactical Setup
Iβm targeting a short-term move toward $210 with a stop at $185. Above $192, Iβd expect call buyers to return en masse. A break over $201.78 could ignite another round of price target lifts into $230.41.
Whatβs your take? Can Reddit rewrite its ATH this quarter, or do we need a new upside catalyst from the AI side?
π’ Donβt miss out! Like, Repost and Follow me for exclusive setups, cutting-edge trends, and insights that move markets ππ Iβm obsessed with hunting down the next big movers and sharing strategies that crush it. Letβs outsmart the market and stack those gains together! π
Trade like a boss! Happy trading ahead, Cheers, BC πππππ
@Tiger_comments @TigerPicks @TigerStars @TigerWire @TigerObserver
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- Cool Cat WinstonΒ·08-03TOPThat $6.8M 0DTE sweep hit like a freight train. I donβt think Iβve seen this kind of institutional aggression since the META Q1 run. The price slicing through $155 and $201 with that kind of volume? Thatβs not random, thatβs rotation. RDDTβs got a real data asset, and the TAM narrative isnβt priced yet.6Report
- Hen SoloΒ·08-03TOPThe valuation discussion nailed it. 60x P/S versus SNAPβs 10x makes sense only if Reddit actually becomes the backbone of AI training workflows. You made a compelling case that itβs getting there. The insider buys and Huffmanβs quote sealed it for me. The risk/reward is asymmetrically interesting now.5Report
- Tui JudeΒ·08-03TOPIβm still thinking about that phoenix image you painted with the sweep and AI backdrop. Itβs not just a breakout on paper, itβs symbolic. Iβd argue this is one of the few setups this quarter where the macro headwinds feel irrelevant. Watching how NVDA got smacked and RDDT soared really says something.4Report
- QueengirlypopsΒ·08-03TOPπ₯that phoenix metaphor?? i felt that in my portfolio. wild how rddt held while the whole market dipped. this post hits fr2Report
- Kiwi TigressΒ·08-03TOPπokay but why was this lowkey a better AI play than half the semis this week lol3Report