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Reddit sues AI startup Anthropic for breach of contract, 'unfair competition'
CNBC· 2025-06-04 17:39
Core Viewpoint - Reddit is suing Anthropic for breach of contract and unlawful business practices related to unauthorized use of its platform and user data [1][2] Group 1: Legal Allegations - The lawsuit claims that Anthropic has been training its AI models on personal data from Reddit users without consent [1] - Reddit alleges harm due to the unauthorized commercial use of its content [1] Group 2: Anthropic's Stance - Anthropic is accused of disregarding Reddit's rules and users, believing it can use content freely without repercussions [2]
RDDT NOTIFICATION: Lose Money on Reddit, Inc.? BFA Law Alerts Investors that its Investigation Could Allow Investors to Recover Losses (NYSE:RDDT)
GlobeNewswire News Room· 2025-06-04 13:17
Core Viewpoint - Reddit, Inc. is under investigation for potential violations of federal securities laws, primarily related to misleading statements about the impact of Google's AI on its user growth [1][2]. Group 1: Investigation Details - Bleichmar Fonti & Auld LLP is leading the investigation into Reddit for possible securities fraud [1]. - The investigation stems from Reddit's assurances to investors that Google's AI did not materially affect its user growth, which has been contradicted by evidence [2][3]. Group 2: Impact on Stock Performance - Following a downgrade by Wall Street analyst Baird, Reddit's stock price fell by $9.79, or over 9%, from $105.64 on May 20, 2025, to $95.85 on May 21, 2025 [4].
RDDT STOCK: Suffer Losses on Reddit, Inc.? BFA Law Notifies Investors of Pending Securities Fraud Investigation (NYSE:RDDT)
GlobeNewswire News Room· 2025-06-02 12:46
Group 1 - The investigation into Reddit, Inc. is initiated by Bleichmar Fonti & Auld LLP for potential violations of federal securities laws [1] - Reddit operates a social news aggregation and forum platform, receiving significant user traffic from Google Search [2] - Reddit previously assured investors that Google's AI did not materially impact its user growth, which is now being questioned [2][3] Group 2 - Google's AI has negatively affected Reddit's user growth by reducing the need for users to visit Reddit for answers, as they can find them directly in Google's search results [3] - Following a downgrade by Wall Street analyst Baird, Reddit's stock price fell from $105.64 to $95.85, a decline of over 9% on May 21, 2025 [4] Group 3 - Investors in Reddit may have legal options and are encouraged to submit their information to the law firm for potential representation [5] - Bleichmar Fonti & Auld LLP is recognized as a leading firm in securities class actions, with notable recoveries in past cases [6]
RDDT INVESTIGATION NOTICE: Reddit, Inc. is being Investigated for Securities Fraud – Contact BFA Law if You Suffered Losses (NYSE:RDDT)
GlobeNewswire News Room· 2025-05-31 11:07
Core Viewpoint - Reddit, Inc. is under investigation for potential violations of federal securities laws, primarily related to its user growth being negatively impacted by Google's AI search results [1][2][3]. Company Overview - Reddit operates a social news aggregation and forum platform, which has seen a decline in user traffic as Google’s AI reduces the need for users to visit Reddit for answers [2][3]. Impact of Google's AI - Google's implementation of AI in search results has reportedly hindered Reddit's user growth, contrary to Reddit's assurances to investors that it would not have a material impact [2][3]. Stock Performance - Following a downgrade from Wall Street analyst Baird regarding Reddit's stock price target due to concerns over user growth, Reddit's stock price fell by $9.79, or over 9%, from $105.64 on May 20, 2025, to $95.85 on May 21, 2025 [4].
3 Beaten-Down Stocks Trading 50% Below Their 52-Week Highs
MarketBeat· 2025-05-27 21:45
Core Viewpoint - Many previously high-performing stocks have experienced significant declines due to various factors, particularly affecting the technology and consumer discretionary sectors in 2025 [1][2]. Group 1: Marvell Technology - Marvell Technology is compared to Broadcom due to its involvement in custom semiconductors, which cater to specific customer needs [3]. - The 12-month stock price forecast for Marvell is $103.22, indicating a potential upside of 58.48% from the current price of $65.13 [4]. - Marvell shares reached an all-time high on January 23, 2025, with a total return of approximately 243% from the beginning of 2023 until that point [4]. - Following the DeepSeek revelations, Marvell shares dropped over 19% in one day and are currently down about 52% from their 52-week high [5][6]. - The forward P/E ratio for Marvell has decreased from nearly 49x to just under 22x, now lower than Broadcom's 33x [6]. - There is potential for Marvell to outperform Broadcom in the future [7]. Group 2: Reddit - Reddit, a communications stock, has seen a decline of over 55% after an impressive post-IPO run, where it rose over 340% since its IPO in May 2024 [8][10]. - The 12-month stock price forecast for Reddit is $140.45, suggesting a 35.58% upside from the current price of $103.60 [10]. - The stock began to decline after reporting slower-than-expected user growth in Q4 2024, compounded by concerns over changes in Google's search algorithm [11]. - Analysts see significant upside potential for Reddit shares, with an average target of around $150, indicating about 49% upside [12]. Group 3: CAVA Group - CAVA Group has experienced a decline of nearly 52% from its all-time high of over $173, which it reached shortly after going public in June 2023 [13][14]. - The 12-month stock price forecast for CAVA is $123.00, indicating a potential upside of 47.80% from the current price of $83.22 [14]. - Analysts raised their price targets for CAVA following its Q2 results reported on May 15, with the average target sitting just under $118, implying a 41% upside [15].
Is Reddit Stock a Buy After Dropping Over 50% From Its 52-Week High?
The Motley Fool· 2025-05-27 09:45
Company Overview - Reddit's stock experienced a significant decline of 56% from its 52-week high of $230.41, primarily due to macroeconomic uncertainties and concerns from analysts regarding its growth sustainability [1][2] Business Performance - In Q1, Reddit achieved a 31% year-over-year growth in daily active unique users (DAUq), reaching 108.1 million [4] - The company reported sales of $392.4 million in Q1, marking a remarkable 61% increase compared to the previous year, and continued revenue momentum with 2024 sales rising 62% year-over-year to $1.3 billion [5] - Reddit's Q1 gross margin was exceptionally high at 90.5%, significantly outperforming Alphabet's gross margin of 60% [6] - The company generated a net income of $26.2 million and free cash flow of $126.6 million in Q1, providing resources for future growth [6] Growth Strategy - Reddit is focusing on international expansion to increase DAUq, utilizing AI to translate content into other languages, which led to an 80% DAUq growth in Brazil during Q1 [7][8] - The company is also testing dynamic product ads (DPA) to capitalize on user interest in product recommendations [8] Challenges - Reddit's reliance on search engines like Google for traffic poses a risk, as changes in Google's algorithms can impact visitor numbers [9] - The rise of AI presents a competitive challenge, although Reddit's CEO believes that users still prefer authentic opinions from real people [10] Financial Outlook - For Q2, Reddit estimates revenue between $410 million and $430 million, a substantial increase from the previous year's $281.2 million [11] - The company has a strong balance sheet, with total assets of $2.4 billion and liabilities of $219.9 million, along with $1.9 billion in cash and short-term investments [11] Investment Consideration - Reddit's forward price-to-earnings (P/E) ratio has decreased significantly, making the stock more reasonably priced compared to previous months [12][14] - The company's return on equity (ROE) has improved over the past year, reaching positive territory in 2025, indicating effective profit generation from invested capital [14][16] - Given its strong financials and growth potential, Reddit is viewed as a solid long-term investment opportunity [16]
Should You Hold on to RDDT Despite the Stock's 39% YTD Decline?
ZACKS· 2025-05-23 18:58
Core Viewpoint - Reddit's shares have significantly underperformed in 2023, dropping 38.8%, compared to a 2.6% decline in the broader Zacks Computer & Technology sector and a 5.4% increase in the Zacks Internet - Software industry [1][2] Performance Analysis - Reddit's advertising revenues surged 61% year over year to $358.6 million in Q1 2025, driven by higher user engagement and AI initiatives [4] - For Q2 2025, Reddit anticipates revenues between $410 million and $430 million, with a Zacks Consensus Estimate of $426.12 million, reflecting a year-over-year growth of 51.55% [12] Competitive Landscape - Reddit faces stiff competition from Alphabet and Snap, both of which are expanding their advertising capabilities in the digital ad market [13] - Snap's new features, such as Snap School sponsorships and Snap Pixel, are enhancing its advertising offerings, posing challenges to Reddit's market position [14][15] Strategic Developments - Reddit is diversifying its advertising solutions, including the launch of Dynamic Product Ads, which aim to deliver personalized ads and improve Return on Ad Spend [5] - The company has enhanced its partnership with Integral Ad Science to provide advertisers with better measurement capabilities and transparency [8][9] Valuation Concerns - Reddit's stock is currently considered overvalued, with a trailing 12-month Price/Sales ratio of 8.82, compared to the sector average of 6.10 [17] Conclusion - Despite Reddit's expanding advertising business and improved user experience, intense competition and ongoing tariff uncertainties present significant challenges [19]
Wall Street Roundup: Retail Earnings, Reddit Volatility, AI Momentum
Seeking Alpha· 2025-05-23 18:45
Group 1: Target and Retail Sector - Target's earnings report led to a 5% drop in stock price, followed by a 3% rebound, indicating market disappointment but limited movement overall [3][4] - The company lowered its guidance and is losing market share to competitors like Walmart and Costco, compounded by a boycott related to its DEI policies [4][5] - Williams Sonoma also reported disappointing earnings, initially dropping 9% before stabilizing, reflecting a broader trend of bad news being priced into retail stocks [5][6] - Gap is highlighted as a potential standout, with a 59% increase in stock price since mid-April, suggesting positive market sentiment ahead of its upcoming earnings report [6][7] Group 2: Reddit and Market Volatility - Reddit's stock experienced significant volatility, dropping 24% over the week after an 11% rally, raising concerns about changing user habits due to AI [9][10] - Despite strong earnings showing a 61% revenue increase and a 31% rise in daily active users, the market is questioning the sustainability of this growth amid shifting traffic patterns [11][10] Group 3: CoreWeave and AI Trade - CoreWeave's stock has surged approximately 80% since its IPO, driven by a $4 billion deal with OpenAI for cloud computing services [14][16] - The company reported a 420% year-over-year revenue increase, indicating strong demand for AI infrastructure [16][18] - The ongoing AI trade is attracting investor interest, with CoreWeave exemplifying the potential for new players in the market [13][18] Group 4: Bond Market and Economic Indicators - Moody's downgrade of US treasuries has led to a rise in the 30-year treasury yield, which is currently above 5%, the highest since 2007 [22][23] - The downgrade reflects concerns over rising national debt and fiscal deficits, with no immediate resolution in sight [24][25] - Upcoming economic data, including the PCE inflation gauge, is anticipated to provide further insights into the economic landscape [28][29]
Why Reddit Stock Was Falling This Week
The Motley Fool· 2025-05-22 18:45
Core Viewpoint - Reddit's stock has experienced significant declines due to an analyst downgrade and broader market sell-off, raising concerns about its growth prospects and the impact of rising interest rates on growth stocks [1][3][5]. Group 1: Analyst Downgrade - Wells Fargo downgraded Reddit's stock from overweight to equal weight, reducing the price target from $168 to $115, which contributed to a 5% drop in stock price [3]. - The downgrade reflects concerns about competition from Alphabet's Google, particularly its advancements in artificial intelligence (AI) and new search capabilities, which may hinder Reddit's user growth, especially among logged-out users [4]. Group 2: Market Response - Following the downgrade, Reddit's stock fell 11.6% by Thursday afternoon, with a notable 9.3% drop on Wednesday amid a broader market sell-off influenced by weak Treasury auction results and rising Treasury yields [1][5]. - Growth stocks like Reddit are particularly vulnerable to rising interest rates and economic uncertainties, which have contributed to the stock's volatility [5]. Group 3: Business Outlook - Despite recent challenges, Reddit has shown strong user growth and advertising revenue since going public, indicating a solid performance over the past year [6]. - The company's AI-based data licensing business is viewed as having a promising future, leveraging its extensive content corpus across various topics, distinguishing it from traditional AI chatbots [6]. - Continued strong growth and improved profitability will be essential for maintaining investor confidence, although one downgrade is not expected to significantly undermine the business's long-term prospects [7].
Why Reddit Stock Got Hammered on Wednesday
The Motley Fool· 2025-05-21 22:16
Core Viewpoint - Reddit's stock experienced a significant decline of over 9% following an analyst's price-target cut, which is notably larger than the S&P 500's 1.6% drop [1] Group 1: Analyst's Assessment - Baird's analyst Colin Sebastian reduced Reddit's fair-value assessment from $140 to $120 per share, maintaining a "neutral" recommendation despite the adjustment [2] - The price-target cut was influenced by concerns regarding the impact of artificial intelligence (AI) on Reddit's user growth, particularly with advancements from tech companies like Alphabet [4] Group 2: Impact of AI on Reddit - The introduction of AI responses by Google's core unit poses a potential threat to Reddit's user engagement, as users may rely on AI for answers instead of engaging in discussions on the platform [5] - Despite these concerns, the analyst believes that AI cannot yet replicate genuine human interactions, suggesting that Reddit's forum-style format will continue to attract users [6] Group 3: Growth Potential - Reddit is expected to continue attracting new users, which could support double-digit percentage growth in key financial metrics such as revenue and profitability [7]