Here are 2 reasons why social media stock Reddit is a buy
Jim Cramer is a big fan of social media company Reddit , which reported a beat on the top and bottom lines Thursday. “I like the company very much, and I wish I could buy it today for my Charitable Trust,” Cramer said during Friday’s “Squawk on the Street.” Cramer was using hyperbole to make a point. Generally, stocks like Reddit, which are prone to large swings, are not right for the Trust, the diversified portfolio used by the CNBC Investing Club. Friday trading is an example. Shares of Reddit initially jumped 9% Friday morning, but have since reversed course and are down nearly 5% in midday trading. Reddit stock has lost 35% in 2026 alone. It gained 40% in 2025. Reddit went public in March 2024, priced at $34 per share. So, even in its depressed state, the stock is up 320% since then. “They’re doing incredibly well in advertising … and a lot of that is because they offer a bargain,” Cramer explained. “Advertisers know that because instead of having to go give [ Meta CEO] Mark Zuckerberg a check and spend a lot of money with Insta [Instagram], their rates are incredibly low and it’s targeted.” Cramer noted another core part of Reddit’s revenue: selling its data to large language models for training. “It’s one of the greatest things in the world because they have more data,” said Cramer, adding that this data will continuously sell. Reddit delivered fourth-quarter revenue of $726 million, exceeding the Street consensus of $665 million. Earnings per share came in at $1.24, compared with a 94-cent estimate. Reddit’s guidance also exceeded the Street’s forecasts. “We surpassed all targets, built real momentum across our business, and proved our unique community model at scale,” said Reddit CEO Steven Ladd Huffman during the company’s earnings call. During its earnings call, Reddit also announced a $1 billion repurchase program with no set expiration date.
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