Reddit (RDDT) stock took a beating on Tuesday after the social media company was hit with a bearish analyst update. Cleveland Research analyst Ross Walthall warned that the company may face trouble with growth in 2026, as it struggles to find advertisers for its site. Additionally, he warned that current advertisers will likely be unwilling to increase their spending on the platform.
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In a research note to clients obtained by Investing.com, Walthall stated, “Our research was less optimistic on the pace of growth into 2026 – we saw reduced forecasts from large US agencies, somewhat offset by steady outlooks for European & smaller US partners.”
Reddit’s slowing growth makes sense, as the company faces increased competition from other platforms. Walthall specifically noted that increased advertising on TikTok, Snap (SNAP), and OpenAI’s ChatGPT could pull advertising away from Reddit, affecting the company’s 2026 revenue. With this in mind, Walthall expects Reddit’s revenue growth for the year to be 36%, which is below the consensus estimate.
Investors will also note that AI models now turn to Alphabet’s (GOOGL) YouTube more than Reddit as their top social media source.
Reddit Stock Movement Today
Reddit stock was down 7.52% on Tuesday, extending a 13.99% fall year-to-date. Even so, the stock was still up 9.69% over the past 12 months.
Reddit stock trading activity today is muted, as some 97,000 shares changed hands, compared to a three-month daily average trading volume of about 3.72 million units.
Is Reddit Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Reddit is Moderate Buy, based on 15 Buy and seven Hold ratings over the past three months. With that comes an average RDDT stock price target of $264.73, representing a potential 34.34% upside for the shares.
