Reddit (RDDT) Is Up 7.1% After Spotlight on AI Training-Data Deals - What's Changed

• In early January 2026, Reddit drew fresh attention as analysts highlighted its growing role in artificial intelligence, pointing to ongoing talks and existing agreements to license its vast trove of user-generated content for training large language models.
• What stands out is how Reddit’s highly specific, conversational data is increasingly being treated as differentiated “training fuel” for AI systems, potentially opening a higher-margin revenue stream beyond its core advertising business.
• We’ll now examine how this renewed focus on AI data licensing could reshape Reddit’s investment narrative and its long-term earnings mix.

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Reddit Investment Narrative Recap

To own Reddit today, you need to believe its core ad business and user engagement can keep scaling while AI data licensing evolves from a promising add on into something more meaningful. The latest AI focused analyst enthusiasm may support near term sentiment, but it does not remove the key risk that data licensing is still a small, uncertain contributor compared with Reddit’s heavy reliance on advertising.

Among recent developments, Reddit’s data collaboration with Intercontinental Exchange (ICE) stands out, because it shows a concrete, monetized use of Reddit’s content beyond ads. That deal helps anchor the current AI licensing story in real revenue, but it also underlines how much future upside still depends on whether Reddit can secure durable, repeatable agreements across multiple partners.

Yet behind the AI excitement, investors should be aware of how fragile Reddit’s data licensing economics could become if...

Read the full narrative on Reddit (it's free!)

Reddit's narrative projects $3.8 billion revenue and $1.0 billion earnings by 2028. This requires 31.8% yearly revenue growth and a roughly $0.8 billion earnings increase from $216.3 million today.

Uncover how Reddit's forecasts yield a $239.76 fair value, in line with its current price.

Exploring Other Perspectives

Simply Wall St Community members have published 26 fair value estimates for Reddit, ranging from US$97.30 to US$373.97, highlighting how far apart individual views can be. When you weigh those against the current optimism around Reddit’s AI data licensing potential, it becomes clear that understanding both the upside and the limits of this new revenue stream is critical if you want to compare several different viewpoints on the stock.

Explore 26 other fair value estimates on Reddit - why the stock might be worth less than half the current price!

Build Your Own Reddit Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Reddit research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Reddit research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Reddit's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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