Reddit experienced a price decline of 12% last week as the company's shares reacted to broader market trends that affected many tech firms. Despite recent announcements, such as the expansion of partnerships with Integral Ad Science and Samdesk, which emphasize improved data capabilities, external market pressures were significant. The broader market saw a correction with the Dow plunging 4% and the Nasdaq moving into bear market territory, driven largely by investor concerns over the escalating trade war and its potential impact on corporate profits and global economic growth. This backdrop likely influenced the company's share performance negatively.

Be aware that Reddit is showing 2 weaknesses in our investment analysis.

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Over the past year, Reddit's total shareholder returns reached 111.66%. This strong performance contrasts sharply with the broader US market, which saw a return of just 3.3%, and the US Interactive Media and Services industry, which returned 1.1%. A significant driver of Reddit's return was its inclusion in major indices, such as the S&P Global BMI in September 2024 and the NASDAQ Internet Index in March 2025. These inclusions likely enhanced investor interest and confidence. Another positive event was the partnership announcement with Integral Ad Science to bolster ad measurement capabilities, potentially boosting advertiser attraction.

Reddit's Q4 2024 sales results also supported investor sentiment, with sales increasing to US$427.71 million from US$249.75 million year-over-year. Although the net loss for 2024 was substantial at US$484.28 million, the growth in sales indicated a potential path towards future profitability. Additionally, the company's focus on advertiser acquisition, highlighted in March 2025, suggests continued growth and engagement efforts aimed at enhancing revenue streams.

Get an in-depth perspective on Reddit's performance by reading our balance sheet health report here.

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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