Price objective of Reddit shares raised by analysts before the results report

Reddit (RDDT) It encourages users to immerse themselves, but not as a boxer who launches a match. The motto of the social networks giant, “Dive into Anything”, invites people to explore their vast content.

Reddit, established in San Francisco in 2005, allows registered users to publish links, text, images and videos, which other users can vote for or against. These publications are classified as communities created by users called “Subbreddits”.

Reddit gained significant attention during the increase in 2021 memes shares, where retail investors in the Subnet “Wallstreetbets” collaborated to buy shares of very short companies such as Gamestop (GME), with the aim of forcing sellers in short to cover their positions. This event was represented in the 2023 “Dumb Money” film.

In March, Reddit went over and, in May, he made his first call for results as a public company.

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Steve Huffman, co -founder and executive director of Reddit, declared during the call: “We believe that large companies thrive in public markets and we are proud to have made this transition this quarter. Our initial public offer was an important milestone for the company.”

For his first quarter, Reddit reported a loss of $ 8.19 per share of $ 243 million in income. The platform reported 82.7 million daily active users, exceeding the expected 76.6 million.

“Reddit is receiving more visitors than ever,” said Huffman. “It is one of the largest platforms for genuine connections and conversations online, and more and more people find it and value it.” He also emphasized the company’s investments in automatic learning and artificial intelligence to improve the experience and moderation of the user.

“We use automatic learning to help users find communities they enjoy, promoting participation throughout the platform,” he added.

Recently, Reddit announced a collaboration with OpenAI to integrate its content with Chatgpt, the virtual assistant developed by the artificial intelligence company backed by Microsoft (MSFT), launched in November 2022.

This association will allow the Reddit content to be accessed through ChatgPT and other new products, helping users to discover and interact with Reddit’s communities through the REDDIT data API, which provides real -time structured content.

Reddit also launched an association program with the main sports leagues, including NBA, NFL, Major League Baseball and Nascar.

Analysts adjust actions pricing objectives

Reddit will publish its results of the second quarter on August 6, which will lead analysts to adjust their actions of actions of actions.

Roth MKM analyst, Rohit Kulkarni, the Reddit target price increased to $ 67 from $ 61, maintaining a purchase rating for shares. It included contributions from the OpenAI association, but warned that the shares could face pressure as the OPI blocks expire on August 9, referring to the period after the IPO with a source when the first investors cannot sell shares.

In addition, Morgan Stanley raised Reddit’s target price to $ 70 from $ 63, maintaining the same sharing of shares. The firm anticipated the profits by the action of the second quarter for the North America Internet group, highlighting Amazon (AMZN) as its main choice of megacapitalization.

Bernstein analyst Mark Shmulik, increased Reddit’s target price to $ 50 from $ 45, maintaining a lower yield rating. He reviewed short -term estimates due to the OpenAI association announced in May, hoping that it contributes between 500 and 800 basic points to the income from the third quarter.

Shmulik pointed out that the second quarter data showed solid performance, with a web traffic that increased 38% year after year and Google as the main traffic source. However, he mentioned that the true test for Reddit will be in the third quarter, when changes in the Google algorithm could affect web traffic and advertising income.

Future growth and user participation

Reddit’s growth is not just about numbers; It is also about improving user experience. The focus of the platform in artificial intelligence and automatic learning aims to make the content more relevant and attractive to users. By improving the way in which the content is recommended and moderate, Reddit hopes to create a more pleasant and interactive environment for its users.

The association with Openai is particularly remarkable. Chatgpt integration means that users can interact with REDDIT content in new and innovative ways. This could attract more users to the platform, increase the time they spend on the site and increase general participation. This strategic movement is aligned with the objective of Reddit to become a leading source of information and debates promoted by the Internet.

In addition, Reddit’s collaborations with the main sports leagues such as the NBA, NFL, MLB and Nascar provide users to exclusive content such as outstanding videos, images behind the scene and interactive sessions. These associations not only improve user experience, but also attract sports fans to the platform, which potentially increases user participation and retention.

Challenges and considerations

Despite the positive perspectives, Reddit faces several challenges. The expiration of the opi locks could cause greater volatility, since the first investors could sell their shares. This could exert down pressure on the price of shares in the short term.

In addition, changes in the Google algorithm could significantly affect web traffic and Reddit’s advertising. Since search engines play a crucial role in directing traffic to the platform, any negative impact on search visibility could affect Reddit’s growth.

Investors should also consider competitive panorama. Other social media and communities platforms are constantly evolving and Reddit needs to continually innovate to stay at the forefront. The company’s approach to AI and strategic associations is a step in the right direction, but will need to maintain this impulse to guarantee long -term success.

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