Reddit owns continuously updated user-generated data (dialogue, emotion, engagement) that is becoming mission-critical training fuel for frontier AI models. As the market reprices data reservoirs from traditional media to strategic AI suppliers, Reddit's data will command premium valuation.
June 16th 2028 $100 calls provide leveraged long exposure to Reddit's anticipated AI-driven margin expansion and revenue acceleration through 2027, with significant upside potential if the company executes on ad algorithm and content feed improvements.
Reddit has strong fundamentals (60%+ revenue growth, 31% net margins, $3B cash) driven by AI-powered improvements to ad targeting and content feed recommendations. The company can sustainably grow by increasing user frequency and ARPU without significant capital intensity, positioning it for substantial upside by 2027 under base and bull cases ($209-$327 per share).
Reddit has durable user engagement and faces significant untapped advertising expansion opportunities. With a market cap of $30B, the company is well-positioned for user growth and monetization scaling, and its communal value proposition is difficult to displace.
Author holds RDDT as part of a $2M portfolio that has appreciated significantly. Despite expecting near-term market pulldown, maintaining long stock position while hedging with covered calls.
Reddit is positioned for significant upside driven by multiple tailwinds: S&P inclusion, AI contract renewals, and strong balance sheet dynamics. With a 9.5x growth multiple based on Instagram comps and margin of safety, Reddit could reach $200+ per share as the company monetizes its 25-billion-conversation data moat through API revenue beyond ads.
Reddit is the only pure-play on AI training data, generating irreplaceable high-quality human-generated signal that frontier labs now need more than compute. Upcoming licensing deal renewals and favorable litigation outcomes against Anthropic and Perplexity could unlock significant value as the market reprices training data.
Author is going all-in on Reddit ahead of earnings announcement, betting on a positive earnings surprise or bullish market reaction.
Reddit's 70% YoY revenue growth, 45% EBITDA margin, and 115% rule-of-40 score (compared to SaaS benchmark of 40%) indicate undervaluation. With ARPU expansion driving monetization runway internationally and AI licensing revenue (~$130M/yr) subject to renegotiation upside, the 32x EV/EBITDA multiple is reasonable on a growth-adjusted basis versus Meta. Author targets ~60% upside to $44B EV by 2027 assuming $4B revenue at 50% margins.
Long position (250 shares) positioned for market recovery and mean reversion during current correction.
Author believes RDDT will rally back to all-time high within a week, allowing recovery from massive trading losses. Position is a $160 call option bet with minimal capital remaining.
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