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Jim Cramer - Mad Money Reddit Inc. RDDT-N PARTIAL BUY May 14, 2025

Is one of the most popular websites in the world. Is -44% from its February peak and a buying opportunity today. Soared 11% today. A wild, volatile stock though. Two weeks, they reported a stunning quarter with top and bottom line beats. They're growing fast and keeping costs down, so that means profits. Despite market worries over digital ads, Reddit execs offered strong guidance in earnings and revenues. And yet shares sank after that report; the sellers were wrong. Some analysts feared growth was slowing, even though numbers were good. Also, company guidance was cautious in its user forecast due to changes in Google's search algorithm; Reddit depends on Google to drive traffic. However, active advertisers grew 50% YOY, including in pharma, autos, telcos and financials. This puts to rest fears of Reddit unable to monetize its user base; 40% of Reddit chats are commercial in nature. In AI, Reddit has entered contracts with OpenAI and such to give access to Reddit's data API that will offer a AI a huge archive of Reddit's user-generated discussions; this will help train and improve AI. However, shares trade at a high 54x 2026 PE, though earnings are suppose to grow 85% in 2026. Buy Reddit here, but it is volatile.

Jim Cramer - Mad Money

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BUY

The CEO has a great long-term model. he expects good numbers from them.

WATCH

Be aware that when you have a stock that hasn't been listed for that long, you don't have a lot of data to work with. Technical analysis is all about crowd behaviour -- trends, volume, a picture of how investors feel about a stock.

Since the summer, this one broke out of a saucer-like formation and now it's heading up. So far, looks good. But because it's such a "young" stock as far as being listed, hard to tell if any resistance or stopping points ahead.

BUY ON WEAKNESS

He likes it, but the chart is parabolic. It's moved up too much and needs to pull back.

SELL ON STRENGTH

Would recommend selling shares. Media and social media very competitive. Other companies like Snapchat, Meta and X can erase future of company very quickly. Too hard to determine outlook for this business.

BUY ON WEAKNESS

It went up huge recently. Buy at $140-150.

BUY

Up 11% this week, and 35% this year. RSI of 74. Giving it a long leash in his stop. Has long owned it. It's on fire.

PARTIAL BUY

Went down. There was a big short squeeze. The CEO is doing very well, but fell short of high expectations. Start a position now and leave room for adding more if it goes down.

PARTIAL BUY

Expectations were too high going into the quarter, and there was no way they could be them. Shares have since fallen enough for a partial buy and an entry.

BUY ON WEAKNESS

Is -27% this year, but above its IPO. Have grown revenue 50% in the past 3 quarters. The last quarter was amazing. Hold $2 billion cash. However, they are closely tied to search, and AI will take a lot of that business away. Also, AI searches are using their answers. Also, trades at a high 52x PE. This will be okay, but buy lower.

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