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Reddit Inc. (NYSE: RDDT) closed just above $230 on Tuesday night, setting up a finish to a strong year that has seen the stock rise about 40%.

After a run like that, some investors might be forgiven for urging caution, yet analyst enthusiasm around the stock has only intensified as the year draws to a close. 

A wave of bullish updates in December has pushed Reddit back onto investors’ radars and raised a more provocative question—could there really be another 40% of upside waiting for the stock in 2026?

The analysts say yes—let’s take a closer look at why.

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Analyst Conviction Keeps Building

Having already gained more than 400% since going public last year, Reddit was one of the most consistently supported names on the Street this past quarter. 

Buy ratings have been reiterated steadily over the past few months; for example, Citigroup reaffirmed its bullish stance in November, and B. Riley did the same in October.

December has only seen analyst momentum build. Piper Sandler, Needham & Co, and Jefferies have all reiterated Buy or equivalent ratings in the past few weeks.

The Jefferies team went so far as to assign a Street-high $325 price target, implying upside of around 40% from current levels.

What stands out is not just the number of bullish calls, but their timing. These updates are landing after what has already been a strong year for the stock, which makes their confidence all the more telling.

Why Reddit Is Emerging as an AI Search Winner

The common thread across recent bullish commentary is a shift in how internet discovery is evolving. As users increasingly move away from clicking blue links and toward consuming AI-generated answers, the sources those answers cite become more valuable than ever.

Analysts broadly agree that Reddit is exceptionally well-positioned in this new paradigm. Multiple independent studies have shown that Reddit is cited disproportionately often in AI-generated responses, far more than traditional publishers. As AI summaries compress referral traffic from conventional search results, platforms that are quoted directly stand to gain influence, visibility, and ultimately monetization power.

In practical terms, this means Reddit’s role in online discovery may actually expand even as overall search traffic fragments. Analysts view this as a structural tailwind rather than a short-term trend, and one that could materially reshape how Reddit captures value over time.

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More Than Just a Social Platform

Beyond citations, Reddit’s cultural reach is increasingly being viewed as a strategic asset. The platform hosts more than one billion human-created posts and reported more than 116 million daily active users in its most recent earnings report. 

This depth of human-generated content is highly attractive for training large language models. Analysts see licensing agreements around this data as an incremental revenue opportunity that is not yet fully reflected in current estimates. Importantly, this represents a potential upside that complements, rather than replaces, Reddit’s core advertising business.

This combination of relevance in AI-driven discovery and monetizable data helps explain why sentiment has continued to improve even after this year’s rally. In many ways, Reddit’s story is still in its infancy, and it’s clearly valued as more than a social platform.

What Needs to Go Right From Here

That being said, at $230 and with a price-to-earnings ratio of more than 130, expectations are higher than they were earlier in the year, and some volatility is to be expected with a growth stock like this. Execution around monetization, user engagement, and data partnerships will matter, and any stumble could test investor patience.

Still, heading into 2026, the setup remains compelling. Reddit doesn’t need to do a whole lot more than continue to post strong performance without major setbacks. That’s easier said than done, but if it can maintain its momentum through January and then smash February’s earnings report, the 40% upside that Jefferies is targeting could quickly be realized.

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