Reddit is gearing up for more M&A, the company told analysts on its fourth-quarter earnings call on Thursday. Reddit CFO Andrew Vollero said the online forum site is looking for businesses that can either leverage Reddit’s scale — meaning their products become more impactful when deployed across Reddit’s massive user base — or help grow the company’s user base. “[We’re] looking to buy capabilities, technologies, and companies,” he said during the introductory remarks. Investors, obviously, wanted to k ...

Core Viewpoint - Reddit's stock is experiencing a decline despite the company reporting strong financial results, leading to discussions on Wall Street regarding the future trajectory of the social media platform [1]. Financial Performance - Reddit has released a positive set of financial results, which typically would bolster investor confidence; however, the stock is still falling [1]. Market Reaction - The market's reaction to Reddit's earnings report is mixed, with analysts and investors debating the implications of the results for the company's future [1].

Market Overview - The week experienced significant drawdowns across various assets including gold, silver, Bitcoin, and tech stocks, particularly in the semiconductor sector [1] - Bitcoin saw a notable decline, dropping below 61,000 before a slight recovery on Friday [1] - The Dow reached a record high on Tuesday but faced a pullback, while the S&P 500 and Nasdaq entered negative territory for 2026 [2] - The Cboe Volatility Index (VIX) reached its highest level since November, indicating increased market volatility [2] Corporate Earnings - A substantial number of quarterly earnings reports were released, with notable contributions to tech sector challenges from companies like Advanced Micro Devices (AMD), Qualcomm (QCOM), Alphabet (GOOGL), and Amazon.com (AMZN) [3] - Despite the tech sector's struggles, some companies like Merck (MRK), Amgen (AMGN), and Eli Lilly (LLY) experienced post-earnings gains [3] - Walt Disney (DIS) reported positive results but still saw a decline in stock price, while Novo Nordisk (NVO) faced a significant drop due to competition [4] - Tapestry (TPR) reached record highs following its earnings report, while Reddit (RDDT) experienced a losing streak before a boost on Friday [4] Future Outlook - The upcoming week is expected to bring more earnings reports and economic data releases [5] - Schaeffer's Senior Quantitative Analyst highlighted the January barometer as a potential indicator for the S&P 500 based on investor sentiment [5] - A list of the 25 best and worst stocks to own in February was compiled, along with key SPX trendlines to monitor [5]

Financial Performance - Reddit reported fourth-quarter revenue of $725.61 million, exceeding the consensus estimate of $665.44 million [1] - The company posted fourth-quarter earnings of $1.24 per share, surpassing analyst estimates of 95 cents per share [1] Future Outlook - Reddit expects first-quarter revenue to be in the range of $595 million to $605 million, compared to estimates of $577.17 million [2] - The company anticipates first-quarter adjusted EBITDA of $210 million to $220 million [2] Market Reaction - Following the earnings announcement, Reddit shares fell 2.2% to trade at $147.76 [3] - Analysts adjusted their price targets on Reddit after the earnings report [3]

Market Overview - US stock market saw a significant rise, with the Dow Jones approaching the 50,000 points mark, driven by a rebound in technology stocks and Bitcoin surpassing $70,000 [1][6] - The Dow Jones increased by 956.87 points (1.96%) to close at 49,865.59 points, while the Nasdaq rose by 345.80 points (1.53%) to 22,886.39 points, and the S&P 500 gained 98.75 points (1.45%) to reach 6,897.15 points [3][8] Company Performance - Amazon reported earnings per share slightly below analyst expectations and projected capital expenditures of $200 billion for the year, leading to a significant drop in its stock price [3][8] - Reddit exceeded earnings expectations and provided strong guidance, announcing a stock buyback plan [3][8] - Despite Amazon's poor performance, other tech stocks rebounded, with Nvidia rising by 2% and Microsoft increasing by over 1%, although both companies experienced nearly double-digit percentage declines earlier in the week [9] Cryptocurrency Market - Bitcoin experienced a sharp decline of 16% overnight, dropping below $61,000, but rebounded by 4% to recover above $66,000 during Friday morning [9] Sector Analysis - The software sector continued to decline, with the iShares Expanded Tech-Software Sector ETF (IGV) falling by 5%, marking a total decline of over 11% for the week, potentially heading for its largest weekly drop since 2008 due to concerns over AI's impact on the industry [4][9] - Analysts expressed concerns that new AI models from startups like Anthropic could render many software services obsolete, threatening company profits [4][10] Market Sentiment - The market is experiencing a broader risk-off sentiment, with major indices showing declines, indicating a cautious approach among traders [11] - The upcoming release of key economic data, including the January non-farm payroll report and the CPI report, has been delayed, which may lead to further market volatility [11]

Core Viewpoint - Reddit reported strong fourth quarter earnings, exceeding expectations in user and ad growth, but experienced a mixed market reaction with its stock price fluctuating post-earnings announcement [1][2][3]. Financial Performance - Reddit's earnings per share (EPS) was $1.24, surpassing the expected $0.94 [3]. - Revenue reached $726 million, a 70% increase year-over-year, also beating expectations [4]. - For the first quarter of 2026, Reddit projected sales between $595 million and $605 million, higher than market expectations, with earnings projected between $210 million and $220 million, exceeding the estimate of $203 million [4]. Analyst Ratings and Price Targets - Guggenheim raised its price target for Reddit from $245 to $255, maintaining a buy rating, citing strong revenue and profit growth [6]. - Several analysts lowered their price targets, but all remain significantly above the current trading price of $145. For instance, Evercore ISI reduced its target from $320 to $290, while Oppenheimer lowered it from $300 to $250 [7][9]. - Caner Fitzgerald lowered its price target to $170 from $240, maintaining a neutral rating, indicating strong growth but cautioning on user growth trajectory [10][11]. Market Reaction - Despite the strong earnings report, Reddit's stock initially rose but then fell by 4%, indicating a mixed market sentiment [1][2]. - Analysts noted that the downward movement in stock price may be influenced by sector-wide deratings, with many firms adjusting their targets due to broader market conditions [8][12].

Core Insights - Reddit (RDDT) reported fourth-quarter 2025 earnings of $1.24 per share, exceeding the Zacks Consensus Estimate by 29.30%, compared to earnings of 36 cents per share in the same quarter last year [1] - Revenues reached $725.6 million, surpassing the Zacks Consensus Estimate by 8.71%, and reflecting a year-over-year increase of 69.7% [1] - RDDT shares rose 7.60% in pre-market trading following the strong quarterly results [1] Revenue Breakdown - U.S. revenues, which account for 80% of total revenues, increased by 67.8% year over year to $583.3 million [2] - International revenues, making up 20% of total revenues, surged 77.9% year over year to $142.3 million [2] - Advertising revenues grew by 75% year over year to $690 million, while Other revenues rose by 8% year over year to $36 million [2] User Engagement Metrics - Daily Active Uniques (DAUq) increased by 19% year over year to 121.4 million, with U.S. DAUq up 9% to 52.5 million and International DAUq up 28% to 68.9 million [3] - Weekly Active Uniques (WAUq) rose by 24% year over year to 471.6 million, with U.S. WAUq increasing by 12% to 193.4 million and International WAUq climbing 34% to 278.2 million [3] Average Revenue Metrics - Average revenue per unique (ARPU) increased by 42% year over year to $5.98, with U.S. ARPU rising by 53% to $10.79 and International ARPU climbing by 38% to $2.31 [4] Operating Performance - Reddit reported a GAAP gross margin of 91.9%, a decrease of 70 basis points year over year [5] - Sales and marketing expenses surged by 103.5% year over year to $163.9 million, while research and development expenses rose by 5.4% to $198.9 million; General and Administrative expenses decreased by 2% to $72.3 million [5] Financial Metrics - Adjusted EBITDA for the fourth quarter was $327 million, up from $154.3 million in the same quarter last year, with an adjusted EBITDA margin of 45.1% [6] - As of December 31, 2025, Reddit had cash and cash equivalents of $2.47 billion, up from $2.22 billion as of September 30, 2025 [7] - The company generated $269 million in cash from operating activities in the fourth quarter, compared to $185 million in the previous quarter, and reported free cash flow of $263.6 million, up from $183 million in the previous quarter [7] Q1 2026 Guidance - For the first quarter of 2026, Reddit expects revenues between $595 million and $605 million and adjusted EBITDA between $210 million and $220 million [10]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company focuses on medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - Proactive's news team delivers insights across various sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] Group 2 - Proactive is committed to adopting technology to enhance workflows and content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Welcome to Morning Brief. I'm Julie Hyman. Let's get to the three things you need to know today.First up, stocks pointing to gains to close out a volatile week. Wall Street seeing the worst selloff in months as AI concerns fueled a rotation out of tech. The State Street Technology ETF on track for its worst week since April.If you look at one uh ETF that tracks software, IGV is having its worst week since 2008. Plus, Amazon is sinking after announcing it plans to spend $200 billion on its AI buildout this y ...

Market Overview - Stocks are showing signs of gains to close out a volatile week, with Wall Street experiencing its worst selloff in months due to AI concerns leading to a rotation out of tech [1] - Nearly $1 trillion in market value was wiped out by the software selloff, affecting major companies in the sector [4] - The State Street Technology ETF is on track for its worst week since April, while the IGV ETF tracking software is having its worst week since 2008, down about 12% [2][10] Company-Specific Insights - Amazon plans to invest $200 billion in AI this year, primarily for its Amazon Web Services (AWS) cloud unit, which CEO Andy Jassy describes as an "extraordinarily unusual opportunity" [2][24] - Amazon's revenue outlook fell below Wall Street expectations, contributing to a decline in its stock price amid fears of AI disruption [24] - The growth rate for AWS has increased from mid-teens to nearly mid-20% over the last three quarters, indicating a positive return on investment in that segment [29] Industry Trends - Concerns over AI disruption have led to significant pressure on software companies like ServiceNow, Salesforce, and Microsoft, with investors questioning which businesses will be affected and to what extent [5][6][12] - The broader tech market is not far from all-time highs, but there has been considerable damage to high beta momentum stocks, which have seen a reversal in performance [8][9] - Investors are becoming more discerning about future returns, especially as companies transition from capital-light to more capital-intensive operations [16] Economic Indicators - Manufacturing activity has expanded at the fastest pace in over three years, suggesting a potential turn in the industrial cycle after a prolonged period of stagnation [19] - The dollar has fallen about 9% in the last year, with investors shifting risk hedging strategies away from the US, indicating a change in how risk is perceived [50][51]