Reddit's stock soars, as Wall Street sees a small part of its business getting a lot bigger

By James Rogers

The social-media platform is reaping the benefits of its globalization effort, and there's room for more international growth ahead

Reddit's stock was surging after better-than-expected third-quarter results

A small part of Reddit Inc.'s business provided a big boost to the social-media platform's third-quarter results, and Wall Street seems to believe that part is only going to get bigger.

While the company's (RDDT) international business accounted for less than 20% of its revenue during the latest quarter, it accounted for most of its users, and growth is accelerating. Reddit said late Thursday that international daily active users surged 31% from a year ago, to 55% of its daily active users.

"International markets are still largely untapped for Reddit," wrote Truist Securities analyst Youssef Squali in a note Friday. "We see a significant runway for growth overseas, given other social platforms have established a strong presence in countries outside the U.S."

Take Meta Platforms Inc. (META), for example. The Facebook parent's latest quarterly numbers highlight the scale of this international opportunity; users outside the U.S. and Canada accounted for more than 57% of Meta's revenue during the third quarter. So Reddit has a big opportunity to keep growing.

The stock was soaring 12.4% in afternoon trading, at last check. Squali raised his price target to $270 from $260, which implies further 24% upside from current levels.

At the forefront of Reddit's international push is machine translation, or translating content for global audiences. During the third quarter, the company extended this offering to 30 languages, up from 23 last quarter, and added languages such as Japanese, Polish and Turkish.

There is plenty of room to extend this effort. There are more than 7,000 languages in the world, according to Berlitz, although the language-services company notes that more than half of the global population speaks just 23 of them.

Reddit's global push involves more than just translation. Speaking during the conference call to discuss the results, Reddit Chief Executive Steve Huffman said the company has built a local-content framework to identify the top interests in each country, which it uses to guide partnerships, content and marketing. This approach has worked well in India, he said, adding that Reddit is now applying it in Australia, Brazil, Germany and France.

Earlier this year, the company extended machine translation to Hindi, one of India's most spoken languages, and also tapped cricket legend Sachin Tendulkar as a brand ambassador. Reddit is currently working to bring machine translation to Bengali and additional languages.

In a note released Friday, Oppenheimer analyst Jason Helfstein cited Reddit's machine-learning-powered language translation as a key catalyst, saying this can drive better international expansion than expected. Helfstein maintained his outperform rating for Reddit.

The social-media platform is also integrating Reddit Answers - an AI-powered feature designed to make it easier for users to find what they are looking for - to non-English languages.

International operations could also fuel further growth in Reddit's advertising business. J.P. Morgan analyst Doug Anmuth pointed to the company's ad revenue, which grew 74% year over year, as driven in part by strength across geographies and verticals.

"Reddit continues to capture share of advertiser budgets," Anmuth wrote Friday, noting that the company's advertiser count grew 75% year over year. However, the analyst thinks that Reddit's advertiser count remains relatively low, likely in the range of tens of thousands. J.P. Morgan has a neutral rating on Reddit.

Of 31 analysts surveyed by FactSet who cover the stock, 19 are bullish, 10 are neutral and two are bearish.

Reddit shares have risen 33.7% in 2025, outpacing the S&P 500 index's SPX gain of 16%.

-James Rogers

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10-31-25 1330ET