Is Reddit Stock an Nvidia-Level Winner?

Reddit's market debut had Wall Street buzzing—but can it really deliver Nvidia-level returns?

The Social Media Gamble

Reddit's IPO captured attention with its meme-stock legacy and community-driven platform. Unlike Nvidia's hardware dominance, Reddit bets on digital engagement—a riskier proposition in volatile markets.

Revenue Realities

While Nvidia's chips power AI revolutions, Reddit monetizes conversations. Advertising and data licensing drive growth, but scaling requires navigating privacy concerns and platform fatigue.

Market Momentum vs. Fundamentals

Nvidia's rise mirrored technological shifts. Reddit's trajectory hinges on social trends—less predictable than semiconductor demand. Analysts watch user metrics closely, but hype often outpaces earnings.

Investment Calculus

Comparing Reddit to Nvidia ignores core differences: one fuels computation, the other conversation. Both attract speculation, but only one has repeatedly proven its market-defining potential. Wall Street’s latest darling? Maybe. Nvidia’s equal? Not yet—and your portfolio knows the difference.

Image source: Getty Images.

Is Reddit stock on the verge of an incredible winning streak?

Reddit's share price has seen massive gains since its March 2024 IPO, as the company's social platform has become an increasingly popular data source for training large language models (LLMs). With its last quarterly report, Reddit reported a sales increase of 78% year over year to reach $500 million. Meanwhile, the business posted a stellar gross margin of 90.8%. The company also guided for sales to come in between $535 million and $545 million in the current quarter -- suggesting that strong sales momentum is poised to continue in the near future.

Reddit stock now has a market capitalization of roughly $49.5 billion and is valued at approximately 24 times this year's expected sales. The company's platform has become one of the top destinations for data used to train LLMs, and it looks like this will continue to be true in the NEAR term.

While matching Nvidia's stock performance over the last year is a tall order, there are good reasons to think that Reddit is poised to keep crushing the overall market. For risk-tolerant investors seeking potentially explosive AI plays, Reddit stock looks like a worthwhile portfolio addition right now.