Reddit experienced a 12% share price decline over the past week, amid its addition to the NASDAQ Internet Index and its active pursuit of new advertising deals. Despite these developments, the company faced a broader market that dropped 3%, possibly intensifying negative sentiment. While tech titans and other stocks generally fared better in this volatile period, driven by optimism around pending tariff announcements from President Trump, Reddit's ongoing strategic moves in enhancing its advertising platform and index inclusion were likely overshadowed. The mixed market reaction indicates a complex landscape affecting Reddit's short-term stock performance.

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Over the last year, Reddit's total shareholder return reached 118.14%, significantly outperforming the US Market's and its industry returns of 7.5% and 7.2%, respectively. This robust performance was supported by several key events. The company's revenue surged to US$1.30 billion in 2024, a substantial increase from the previous year. Key earnings highlights included rising net income, notably Q4 2024 profits reaching US$71.04 million, a stark contrast to losses earlier. Another growth catalyst was Reddit's inclusion in prestigious indices like the S&P Global BMI Index in September 2024, which likely elevated investor interest.

The collaboration with Intercontinental Exchange, announced in February 2025, to enhance data analytics offerings reflects Reddit's ambition to broaden its technological reach. The June 2024 partnership expansion with Sprinklr, integrating the Advertising API, underscores efforts to improve advertising efficiency. These initiatives likely contributed to a positive investor outlook, aiding longer-term share performance despite recent short-term challenges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NYSE:RDDT.

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