Reddit is being re-rated in real time, from a hard-to-value social platform into one of the clearest data stories of the AI era. For years, the debate around Reddit was whether its communities could ever be monetized without breaking the culture that made them valuable. That question is quietly being answered as it successfully runs two engines at once: an advertising business that has become a performance channel for brands, and a content-licensing business that turns human conversation into an input AI labs need. The market is starting to treat Reddit like core infrastructure for the AI answer layer. The breakout after a volatile stretch that saw the stock swing from deep drawdown to sharp rallies is showing that buyers have stepped back with conviction. The narrative has shifted from “can Reddit monetize?” to “how much optionality is embedded in the licensing model? The bull case is that it is one of the very few internet platforms growing fast enough, and sitting in a rare enough position in the AI supply chain, to keep earning its premium. Trade timing & outlook RDDT recently broke above the $200 level after basing over the last three months, and momentum has turned positive again with the stock reclaiming its longer-term moving average. Breakout confirmation : The stock has broke out above $200 on strong relative strength and volume, turning what was resistance into the pivot the trade is structured around. Level to hold: The $200 zone now becomes the key area to defend, with the short put positioned right at that reclaimed breakout level. Upside potential: A sustained move higher puts the $227 resistance back in play, and if momentum carries, our $260 upside target comes into view, with the prior 52-week high near $283 marking our final target level above that. Fundamentals Reddit trades at a clear premium to its industry, but the growth and margin profile is in a different league from the broader interactive media group. The setup is compelling because while its valuation sits well above the median, expected revenue growth, EPS growth, and net margins each run at roughly two to three times the industry median. When a company is growing at these rates while inflecting into real profitability, the multiple is less an obstacle. The Street rates RDDT a Buy with an average target in the $230 to $236 range and a high end above $300. Bullish thesis Ad Revenue Is reaccelerating: Advertising revenue grew 74% year over year to $625 million in Q1, part of a seventh consecutive quarter of 60%-plus total revenue growth, with strength broadening across the full ad funnel. AI licensing optionality: Reddit’s data-licensing agreements with Google and OpenAI are collectively worth more than $200 million annually, all built on 25 billion-plus posts that has become one of the scarcest training inputs in AI. Operating leverage is inflecting: Adjusted EBITDA grew 131% on revenue up 69%, producing a 40% EBITDA margin against a 91% gross margin. With the cost base largely fixed, incremental ad and licensing dollars are falling directly to the bottom line. Users and monetization both climbing: Daily active uniques reached 126.8 million, up 17%, while global ARPU rose 44% to $5.23, showing Reddit is growing the audience and monetizing each user at the same time. Options trade To express a bullish view with defined risk, look to Sell the Aug. 21, 2026 $200 / $175 Put Vertical @ $10.37 Credit. This entails: Selling the Aug. 21, 2026 $200 Put Buying the Aug. 21, 2026 $175 Put Maximum Reward: $1,037 per contract if RDDT is above $200 at expiration Maximum Risk: $1,463 per contract if RDDT is below $175 at expiration Breakeven: $189.63 View this Trade on OptionsPlay for Updated Pricing This structure benefits if RDDT holds above its $200 breakout while allowing you to collect premium in a compelling growth name, with the breakeven near $190 sitting below the recent basing range. Note that Reddit reports Q2 earnings on July 30, which falls within the holding period and is part of why premium is elevated here; the defined-risk structure caps exposure through that event. Summary Reddit is no longer just a social platform searching for a business model. It is compounding advertising revenue near 70%, and inflecting into strong profitability as operating leverage kicks in. The valuation is rich and will stay that way, but few internet names combine this growth rate with this position in the AI data supply chain. With the stock breaking above $200 and fundamentals firmly in gear, RDDT offers a compelling bullish setup. The put spread provides a defined-risk way to express the view that the breakout can hold and that the market is only beginning to price Reddit as a data platform for the AI era. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. 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One of the best AI data stories is emerging in this social media stock, says Tony Zhang
