Wall Street is concerned about a looming recession, with the Nasdaq Composite down 16% in 2025. Despite this turmoil, companies like Reddit and Netflix present promising investment opportunities tailored for growth in digital advertising and entertainment sectors. Reddit's advertising revenue soared 50% year-over-year, indicating strong potential in capturing a share of the $700 billion digital ad market, driven by its engaged user base. As Reddit's stock becomes more reasonably priced after recent declines, analysts project substantial revenue growth by 2028, making it an attractive investment.
Reddit is showing the level of growth you would expect ahead of such a large opportunity. Its advertising revenue grew 50% year-over-year in 2024 to reach $1.2 billion.
Close to half of the discussions on the platform are related to products that people might purchase. This is very appealing to brands.
The stock looked expensive heading into 2025, but fears of a slower ad market have brought the stock down 59% off recent highs.
Analysts expect Reddit's total revenue to reach $3.5 billion by 2028, up from $1.3 billion last year.
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