Reddit Inc. (RDDT) shares surged 9.2% in Friday's trading session, outperforming the broader market as the social media company continued its strong momentum from 2024 amid a tech sector rally.
The stock's sharp intraday rise came on the heels of a 1.5% gain on Thursday, with Reddit shares climbing alongside other major tech and social media giants like Meta Platforms, Pinterest, and Snap. The move higher was fueled by optimism that Reddit could see continued user growth in 2025 if it successfully improves its search functionality, a key theme highlighted by analysts.
In a client note previewing 2025, Piper Sandler analyst Thomas Champion said Reddit's efforts to make its vast collection of user forums more easily searchable could be a significant driver for the company this year. "2025 could be the year for Reddit to improve its search functionality, enhancing the user experience and driving growth," Champion wrote, adding that better search capabilities "may keep daily active user growth higher for longer and improve engagement."
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