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Reddit Shares (RDDT) Add 12% In The Premarket : News of OpenAI Deal Hits

Analyst Team trader
Updated 17 May 2024

Reddit Inc (RDDT) saw its stock price climb by an impressive 11.64% in the last 5 days, reaching $56.38 after a bustling session of trading this week, aiding in part by the meme trade.

In the pre-market today, there was a huge surge this morning of 12.50% with the share price landing on $63.80 on the back of news. The company's stock performance appears to be directly tied to the news that OpenAI has formed a partnership with Reddit, infusing investor confidence in the social media platform.

The partnership between OpenAI and Reddit introduces an innovative approach where Reddit content will be integrated into ChatGPT, as well as other platforms developed by OpenAI. This move is expected to create enhanced content experiences for ChatGPT users, who will soon have access to real-time, structured, and unique content sourced directly from Reddit's vast pool of community discussions. The engagement with Reddit communities is poised to become more intense, driven by authentic user conversations and insights.

The announcement quickly moved the market, with Reddit Inc.'s stock price soaring from $56.30 to $64.78 within a mere 18 minutes, between 4:29 and 4:47 pm, underscoring the significant impact this partnership is anticipated to have on the company's value.


Despite the positive reaction in the stock market, the sentiment among Reddit’s userbase is mixed. Some users are wary, questioning the accuracy and integrity of information disseminated through AI tools like ChatGPT. Others, however, are optimistic, seeing value in the unique perspectives and authentic opinions offered by fellow users, which could now reach a wider audience through integration with AI interfaces.

  • Deutsche Bank have upped the firm's price target on Reddit to $62 from $50 and they keep a Buy rating on the shares.
  • Goldman Sachs have raised the firm's price target on Reddit to $55 from $40 and keep a Neutral rating on the shares
  • Roth MKM raised the firm's price target on Reddit to $61 from $50 and also keep a Buy rating on the shares

This union with OpenAI signifies a progressive step for Reddit, a platform that has, in many ways, defined the meme stock culture. As it ventures into an evolved mode of content delivery and interaction, Reddit not only cements its status as a pioneer in internet culture but also potentially broadens its influence by tapping into the burgeoning AI sector.

The collaboration with OpenAI could further Reddit's mission of bringing community and belonging to everyone in the world, enhancing user experience while simultaneously driving growth and innovation. This deal underscores a broader trend where social media platforms actively seek symbiotic relationships with advanced technology firms to foster growth and remain competitive in the fast-paced digital landscape.

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The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.