Reddit Inc (NASDAQ:RDDT) shares are down on Thursday. RBC Capital’s latest checks showed softer ad‑agency feedback and a weaker outlook compared to bigger platforms. However, Wells Fargo has posted recent upbeat analyst report pointing to strong momentum across the company’s key metrics.
Reddit stock is showing notable weakness. What’s weighing on RDDT shares?
RBC’s latest checks showed softer feedback from small and mid‑sized ad agencies. While the broader digital ad market looks healthy for major players like Google and Meta, the outlook was described as “less positive” for Reddit, with agencies reporting uneven performance and some smaller brands choosing to build organic presence rather than spend on ads, according to Investing.com.
The analyst said Reddit still has room for upside, but noted that expectations are elevated and competition is tightening as larger platforms continue to see more demand. Even with improving conditions across the ad market, Reddit doesn’t seem to be benefiting to the same extent as its bigger competitors.
Reddit’s 2026 Outlook Bolstered by AI and Data Licensing
Wells Fargo analyst Ken Gawrelski lifted his price target on Reddit to $207 from $186 while keeping an Equal Weight rating. He said the company’s consistent execution and supportive market backdrop could set up a strong fourth-quarter.
The report highlights 2026 as a key year for Reddit, driven by improvements in AI‑powered search and upcoming data‑licensing renewals. Despite the optimistic long‑term view, Reddit’s value score remains low at 4.91, suggesting the stock is still trading at a premium relative to its underlying fundamentals.
Reddit’s Mixed Technical Indicators: Short-Term Weakness vs. Long-Term Strength
The stock is currently trading 4.1% below its 20-day simple moving average (SMA) but is 3.1% above its 100-day SMA, indicating some short-term weakness while maintaining longer-term strength. Over the past 12 months, shares have increased by 34.38% and are currently positioned closer to their 52-week highs than lows.
The RSI is at 60.47, which is considered neutral territory, while the MACD is above its signal line, indicating bullish momentum. The combination of neutral RSI and bullish MACD suggests that the stock may continue to experience upward pressure.
- Key Resistance: $240.00
- Key Support: $220.50
RDDT Price Action: Reddit shares were down 10.02% at $227.20 at the time of publication on Thursday, according to Benzinga Pro.
Image: Ink Drop/Shutterstock
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