"South Korean chipmaker SK Hynix on Wednesday released its third-quarter earnings results, which sharply beats estimates for the July-to-September period.

Here are SK Hynix’s third-quarter results compared with LSEG SmartEstimates, which are weighted toward forecasts from analysts who are more consistently accurate:

• Revenue: 104.62 trillion won ($78.86 billion) vs. 98.34 trillion won expected
• Operating profit: 83.33 trillion won vs. 76.72 trillion won expected

Revenue rose 327.9% from a year earlier, while operating profit climbed 632.1% year on year.

Compared with the previous quarter, revenue climbed 31.9%, while operating profit surged 37.6%.

SK Hynix, a key supplier of high-bandwidth memory, or HBM, chips to Nvidia, has emerged as one of the biggest beneficiaries of the global AI infrastructure buildout, as technology companies ramp up spending on data centers and advanced processors.

In August, SK Hynix had announced plans to repurchase and cancel 40 trillion won worth of its own shares, while raising its shareholder return target to more than 50% of cumulative free cash flow generated between 2025 and 2027.

Last week, SK Hynix announced that its U.S. subsidiary Solidigm would halt its review of potential pre-IPO fundraising and IPO options, citing market volatility and share price trends.

The company said it would continue to assess investment timing, scale and financing options to support Solidigm’s growth and enhance shareholder value."

Anthropic's (ANTH.PVT) long-awaited stock market debut could be just weeks away.

The artificial intelligence startup publicly filed for its initial public offering on Monday, releasing its S-1 - the prospectus a company must file with the Securities and Exchange Commission before selling stock to the public. That started a countdown that could end in one of the largest IPOs in history as soon as mid-November.

Before its stock can begin trading on the Nasdaq under the ticker ANT, Anthropic and its Wall Street bankers have to get through an investor roadshow, set a price, and receive a final green light from regulators.

Under SEC rules, the earliest Anthropic could start trading is Monday, Nov. 16, according to Yahoo Finance calculations. At the pace SpaceX (SPCX) set in June - when it went from public filing to first trade in 23 days - Anthropic would debut on Wednesday, Nov. 18.

SK Hynix shares jumped 10.89% on Wednesday after reporting record third-quarter revenue of 104.62 trillion won ($78.86 billion) and operating profit of 83.33 trillion won, easily beating analyst estimates. This growth was driven by surging demand for AI memory chips, with average DRAM selling prices rising by high-20s percentages due to HBM4 sales and server DDR5 shipments climbing over 40%. The company expects market demand to outpace supply through 2030 and has secured long-term contracts covering over 50% of its capacity for 2027 and 2028.

Alongside the record earnings, SK Hynix announced shareholder returns totaling about 100 trillion won, including a 14 trillion won third-quarter dividend boosted by gains from its Kioxia investment, and a new 20 trillion won share buyback following a recently completed 40 trillion won buyback. Meanwhile, CEO Kwak Noh-Jung halted IPO plans for U.S. subsidiary Solidigm due to market volatility. Susquehanna maintained a neutral rating on the stock, favoring Micron and Samsung for their broader diversification while recommending SK Hynix’s U.S. ADRs over its domestic shares.

https://www.cnbc.com/amp/2026/10/28/sk-hynix-third-quarter-profit.html

This month in international markets saw significant volatility in Brazilian equities. EWZ, which tracks the MSCI Brazil GRTR USD index, surged +12.5% at the beginning of the month, as it priced in the probability of a Flavio Bolsonaro win after a strong showing in round one of the Brazilian elections. However, when the dust had settled, Lula unexpectedly came from behind, and the EWZ gave back all its gains and then some, with a -18.4% drop on Monday.

I wanted to figure out the investors viewed Bolsonaro as so much more market friendly. Curiously, I found that the Brazilian stock market did extremely well during Lula's two prior terms and the third current term and was slightly negative during the presidency of Jair Bolsonaro, the father of losing candidate Flavio Bolsonaro. In Brazil, the presidential terms are four years long and align neatly with the calendar year. This makes it really easy to track returns using the MSCI Brazil, which would be the gold standard anyway. All returns are gross returns using USD currency:

I certainly would not have expected the less market friendly candidate to outperform his counterpart (presumably with similar policies as his son) by such a drastic margin, even after eating that monster -18.4% single day drop this week. However, to be fair, Lula 1 was an incredible time for emerging markets, one which likely could not be reproduced again. And Bolsonaro's presidency coincided with the pandemic, which could have hampered returns.

To control for this, I compared the MSCI Brazil against several other benchmarks to which the country belongs. ACWI includes all countries, ACWI ex-USA is the international market excluding the USA, and emerging markets are the MSCI emerging markets. Additionally, while Brazil does not belong to the MSCI USA, MSCI World (a misnomer which means developed markets including USA), and MSCI World ex-USA (developed markets excluding USA), these are included for comparison. Brazil has trounced all of these benchmarks under Lula's presidency and badly lagged all of them under Jair Bolsonaro.

Prediction markets have exploded in popularity, and now Wall Street seems to want a piece of the action.

The NYSE is preparing to introduce binary options on 12 major stocks and ETFs, including Nvidia, Tesla, Apple and SPY.

The idea is pretty simple. Instead of buying the stock, you take a position on whether it finishes above or below a certain price. If you're right, you get a fixed payout. If you're wrong, you lose your stake.

And they're not stopping there.

The exchange is also exploring contracts tied directly to earnings results, meaning people could eventually bet on whether a company reports revenue or EPS above a specific number. Those contracts still need regulatory approval.

With prediction markets already attracting huge interest, bringing this kind of trading to some of the world's most popular stocks could be a pretty big deal.

Earnings season is already chaotic enough and now we are adding all-or-nothing bets on the actual results....

Pretty interesting earnings from Vertiv this morning.

The company makes cooling and power infrastructure for data centers, so it's one of the businesses actually supplying the massive AI buildout.

Their quarterly revenue jumped 61% to $4.3 billion, but what stood out was orders growing more than 100% compared with last year

They also comfortably beat earnings expectations and raised their full-year forecast.

With all the recent concerns about AI spending and whether companies are building too much capacity, these numbers are pretty striking.

$VRT is up around 15% premarket. Anyone holding it or following the companies supplying all these AI data centers?

Fed Chair Kevin Warsh will hold a press conference tomorrow, Oct 28th, at 2:30pm.

Since Kevin Warsh became fed chair, he's made four major policy appearances. The June FOMC, July FOMC, and Jackson Hole in August, and the September FOMC. In all four cases there was a clear market reaction while he was speaking.

Here's my detailed post about this from before the last time he spoke.

https://www.reddit.com/r/wallstreetbets/comments/1wgaetb/the_warsh_effect_and_wednesdays_rate_announcement/

He is 4 for 4 in causing the market to tank during his Q&A. I talked about him making wishy-warshy comments in the session. It scares investors.

If this pattern holds, then there will be a selloff during his press conference. I wrote this before his last appearance and it's exactly what happened. The market might go up before the press conference, and it might go up later. But he's 4 for 4 in causing it to go down during the press conference, especially during the Q&A session.

Ahead of today's FOMC decision, consensus points to a temporary interest rate pause, holding the benchmark steady at 3.75%–4.00% to let the market fully absorb previous tightening actions. However, with September's inflation metrics showing persistent heat, the primary focus is entirely shifted to the 2:30 PM ET press conference, where Chairman Kevin Warsh is widely expected to signal a 25bps rate hike for the December meeting.Given that a hawkish pause is effectively priced into equities, the market’s reaction will depend heavily on the tone surrounding future macro policy projections and the terminal rate outlook. Are you defensively positioning your portfolio into mega-cap tech and cash-heavy alternatives ahead of the afternoon volatility, or are you utilizing options vectors to hedge against a potentially hawkish surprise from the Fed?

Source: Bloomberg

GOOGL and MSFT are both reporting earnings today. Could be an interesting night for tech stocks.

I’m mainly watching Google’s cloud growth and Microsoft’s AI spending. Both have been pouring tons of money into AI, but are they actually making enough from it? Also noticed platforms like mexc have GOOGL and MSFT perpetual futures now. Pretty interesting, though the leverage risk around earnings is no joke.

Personally, I’m more curious about how the market reacts than the earnings numbers themselves. What do you guys think? GOOGL or MSFT? Which one are you betting on?

Every quarter someone posts "insiders dumped $XXB!!" and the top reply is "nothing burger, it's stock comp." Both are partly right. Here's the 60-second filter I use on a Form 4 before I take it seriously.

1. Check the transaction code - S = open-market sale - P = open-market purchase - F = shares withheld to pay tax on vesting - M = option exercise

F and M are almost always noise. Most of the scary headline totals are S trades plus a pile of these.

2. Check the 10b5-1 box Since April 2023, Form 4 has a checkbox showing whether a trade was made under a pre-arranged trading plan. Planned sales were scheduled months earlier and carry little information.

3. Look for cluster buys after a drawdown Several insiders buying with their own cash after a big drop is the classic signal. Live example from last week, straight from EDGAR:

Rapport Therapeutics (RAPP), 21–23 Oct 2026: - 6 insiders bought: the CFO plus five directors - 7 open-market purchases, about $1.66M total - Prices between $26.10 and $27.36 - The largest was a director buying 35,714 shares (~$974K) - The CEO's only Form 4 that week was a small sale (2,210 shares, ~$64K), so "CEO buying" claims floating around are wrong

That's the pattern people look for: several board members writing checks at once after the stock fell hard. It still isn't a guarantee. Biotech insiders can be just as wrong about trial data as anyone else.

4. Read the footnotes A "P" can also be a purchase in an underwritten offering at the offering price. That reads very differently from someone hitting "buy" on the open market.

5. Size it against their holdings A $1M sale from someone holding $2B of stock is nothing. A $1M buy from a director whose entire stake was $3M is something.

Live sell-side example: Sea Limited (SE)

Five executives, including CEO Forrest Li and COO Ye Gang, sold about $25.06M between 25 and 28 Aug 2026, all under 10b5-1 plans. The stock then fell 31.3% ($108.68 on 14 Sep → $74.63 on 23 Oct). It looks damning in hindsight, but by this filter it's low signal: planned, small relative to their stakes, and nobody has changed course since.

Source: SEC EDGAR Form 4s. Not advice.

What filters do you use? Anyone actually backtested cluster buys vs. single-insider buys?

Joby reports Q3 earnings next Wednesday, November 4, after market close. I’m watching two areas in particular: progress toward FAA certification of the S4 and execution on the defense side.

On certification, the first FAA conforming aircraft has started flying off the runway, and flight trackers are watching for its first transition to wingborne flight. Getting to this point is significant, but the next question is how quickly Joby can move through TIA testing and the remaining certification steps. The timing matters because Joby still has to turn years of development and investment into a commercial operation.

The defense side is also worth watching. A new Joby aircraft designated JAI 40 was recently spotted flying at Yuma Proving Ground. It appears to be a military persistent surveillance aircraft, although I haven’t seen official confirmation of its specific mission. Joby’s defense work could provide another source of demand beyond its planned passenger air taxi service, but investors still need to see how these programs translate into contracts, revenue and eventually meaningful margins.

For earnings, I’ll be looking for updates on the certification process, the expected path to commercial service, defense program progress, cash burn and the company’s overall financial position. Operational progress is encouraging, but the key question is how that progress translates into certification and commercial execution.

What are others watching most closely in next week’s report? Is certification timing the biggest near term milestone, or could defense become a more meaningful part of Joby’s business over the next few years?

Disclosure: Long JOBY

Let's say I have £100,000 to invest. I have two trading accounts, one is tax free and has a maximum investable amount of £20,000 per year. The other trading account is taxed on gains and has no limits on investment amount.

I want to invest 50% of my money in an all-world index. The other 50% will be individual stocks.

My query is, for the tax free investing account, would you be better to fill the £20,000 allowance with individual stocks or index fund(s)?

As of now I am reasonably confident that individual stocks will outperform index funds for the foreseeable future and am happy to take on that risk, so it makes sense to me to fill the tax free account with say Nvidia/ Google etc. so taxes on what are hopefully larger gains are minimised.

I suppose it all comes down to risk management, but I am just wondering how others would view handling such a split?

This company has been treated harshly due to a double negative narrative : the rise of CXMT on the memory market and the cyclic nature of the memory market.

This is a narrative but it isn’t even close to what is happening in reality :

- CXMT is only selling memory to Chinese companies and is still behind in products quality. Memory factories are long to make and the memory shortage is present on the Chinese market too.

- Of course memory has always had a cyclical nature but nowadays most of the demand is for a whole new business : AI. All of the hyperscalers have lots of cash to spend and like Nvidia said : "memory is the bottleneck of AI development". Sk Hynix themselves have said in their earnings report that they are sure to complete their paycheck for at least 4 years and every year we can see the memory companies getting longer contracts (50% of 2027/2028 Sk Hynix’s production is sold to LTA 5 years contracts). AI is already printing money (if you think that Anthropic is burning money learn how to read a report) and the robotic revolution has not even started yet.

Sk Hynix is the largest producer of HBM which is vital for AI, they are guaranteed to grow a lot for at least 4 years but the company is at 3 of Fwd p/e. They have announced HUGE dividends and buypacks. If all of this is not enough for you to buy this beautiful company, then move along and you’ll regret this decision for the rest of your life.

Now I know that gold is a classic rare metal that people should have some exposure to in their accounts anyway, but I think there is potential for a longer run over the coming years, so I am going to make my bull case and bear case. I already have a small position, but I am also planning on purchasing more at the current prices. My ETF of choice is GLD since it tracks the spot price directly and also has an annual expense ratio of 0.4%. If anyone prefers a different method, feel free to say as much in the comments. I have considered buying physical as well.

My Bull Case for buying @ ~$366

• GLD sits about 28% below its 52-week high of $509.70. I realize the run up was a good selling opportunity, but gold is still hovering near $4,000 after a sharp pullback. I feel like investors typically fall into two camps after a big correction: this is either a good opportunity to buy in, or the rally is over. So why'd it drop so much? A combo of interest rate expectations, Treasury yield increases, and the dollar momentarily strengthening. I’ll touch on this more in the bear case.
• Over the last 25 years, gold has outperformed the S&P by about double (938% vs 461%). I know 25 years is pretty arbitrary as far as time horizons go, but I am planning on holding for a long time.
• The US federal debt keeps climbing and climbing. In fiscal year 2026 we hit a record $1.05 trillion in net interest payments. I repeat - over $1T on interest alone! How is the US government planning on reining this in? In my opinion, the likeliest path forward is policies that tolerate inflation and erode the true value of the debt. I foresee a lot of money printing in the near future. In this case, people holding cash lose out.
• Have the structural reasons for buying gold changed in the last few years? Has the US eliminated its fiscal deficit? Has the debt begun shrinking? Has federal interest expense returned to historical norms? Have the central banks stopped diversifying reserves? Has the global monetary system suddenly become more disciplined? I am inclined to say no to all of these questions. The short-term circumstances for gold provide some pretty strong headwinds (see the bear case), but I think the long-term forces still apply.
• Gold still matters from a de-dollarization perspective. No fiat currency has ever survived in the history of mankind, and the US dollar can go the same way. Gold can’t be printed like fiat, and there is continued instability in the Middle East. That cuts both ways, though - the conflict supports gold as a safe haven, but it has also strengthened the dollar and kept energy prices elevated (again see bear case).
• As far as following the “smart” money goes, central banks bought over 1,000 metric tons a year from 2022 through 2024, and still added 863 tons in 2025.
• A minor, but legitimate, player is the AI build out. Gold in electronics accounts for ~7% of annual gold demand, compared to jewelry, central bank buying, and investment demand. Figured I would include it since this is a global movement.

My Bear Case for avoiding @ ~$366

• Gold pays no yield, and higher interest rates or other strong performing assets apply pressure or are at least tempting/more exciting.
• A stronger dollar can pressure it, as we’ve seen recently, even if its momentary.
• Reuters reported on Oct 12 that the dollar was near its strongest level in a year and a half, helped by safe-haven demand amid the war in Iran. Higher energy prices are likely to keep inflation elevated, and the SPR is at historic lows. Pressure on other routes to get oil out of the Middle East is exacerbating this.
• All of this points to Warsh keeping interest rates high or pushing them higher. Keep in mind that we are expecting another Fed rate decision on Oct 28, and a hike is definitely on the table.
• The 30 year Treasury bonds are at ~5.3%.
• Some critics think the growth of the US economy could outpace the debt (I don’t personally agree with this).

Possible PT?

Just using this part to say that historical performance is not a guarantee of future price action. Gold can always stop climbing for a number of reasons, and just because gold’s historical rebounds from large corrections have seen it climb higher doesn’t mean that will happen again. Not financial advice, lol.

Quick math on a possible 5-year price target using gold’s 25-year return (938%):

• The multiple of a 938% return = 938/100 + 1 = 10.38x
• Annualized return over 25 years = 10.38^(1/25) - 1 = 1.098 - 1 = 0.098, or 9.8% a year
• Applying that rate for 5 years = 1.098^5 = ~1.6x
• Apply that multiple to the current price: $366 * 1.6 = ~$586. Shave off about 2% for fees and call it ~$575.

That’s about $65 above the 52-week high of $509.70, or roughly 57% above today’s price. That doesn't seem like much in this crazy bull market, but since it is the world reserve asset, I think it is a good play in this environment. I plan to DCA my position over the next few months. Can it can go lower? Yup, I just know I am not buying at the top! Thoughts?

I'm not really sure exactly why this is public, but what are your thoughts on it?

Mine? History has taught us that over the last few decades every platform for offering communication has shifted on to the next 'cool' thing. BBS, IRC, forums, MySpace, Class Reunited, Facebook, DigIt, Reddit, ?

There is so much spam on Reddit now including bot posts that I'd guesstimate is about 40-70% which is designed to manipulate and mould people politically and morally, that I see no value to it other than one of propaganda and advertisements. E.g. The GME Wallstreetbets saga of 2021 which was supported by none other than Musk, and the WSB profitable bots that placed stocks against whatever was spammed in WSB.

I think it's just becoming more and more depressing over the last few years to visit Reddit seeing people argue with bots, bots posts, and so on. The knowledgeable content posters seem to have moved on after Reddit's API changes of a few years ago, or have gone elsewhere.

Is anyone else tempted to just short this?

Edit: I missed out the very obvious information gathering on users which will be used against you, the public.

Disclosure

I am currently invested in Reddit (RDDT), and a large portion of my investment portfolio is allocated to the stock.

Introduction

I believe Reddit is a fast-growing company with expanding margins, increasing user growth, and significant long-term potential. I also believe the company has substantial upside potential from AI licensing deals that could materialize over the next year or so.

I believe Reddit is one of the most compelling investment opportunities in the market. I would like to use this post as an opportunity to surface other ideas, identify potential gaps in my thesis, and learn about any additional research or insights that other investors may have uncovered regarding Reddit stock.

Sections Covered

• Reddit’s Unique Value Proposition
• User Trends and Revenue Per User (RPU)
• Reddit’s Advertising Evolution and Monetization Potential
• Revenue Growth and Margin Expansion
• Balance Sheet and Share Repurchases
• AI Licensing Revenue
• Company Valuation
• Risks
• Conclusion & Price Targets

Reddit’s Unique Value Proposition

Reddit is one of the last places on Earth with a vast array of human-generated content across different communities, subcategories, backgrounds, and demographics. One of its closest competitors is Facebook, but Reddit generally has much more human-written content, whereas other platforms like Facebook and Instagram are much more driven by photos and videos. Reddit is much more focused on text and actual writing.

I think this becomes increasingly valuable in a world of AI, where less and less content is written by humans. Reddit is one of the last places where that type of content remains prevalent.

Reddit is currently the third most-visited website in the world. In my own anecdotal experience, I have never written long posts on Facebook, Instagram, TikTok, or any other social media platform, but I do write extensive content on Reddit, just as I am doing right now with this post. I think many other people and communities have a similar experience using the platform.

User Trends and Revenue Per User (RPU)

Reddit continues to demonstrate strong user growth across both daily active uniques (DAUq) and weekly active uniques (WAUq).

Daily active uniques increased from 110.4 million in Q2 2025 to 130.3 million in Q2 2026, representing 18% year-over-year growth.

Weekly active uniques increased from 416.4 million in Q2 2025 to 514.6 million in Q2 2026, representing 24% year-over-year growth.

International user growth across both daily and weekly active uniques is outpacing growth in the United States, which I believe is largely due to the U.S. market being more saturated. Nevertheless, both metrics are growing at healthy year-over-year rates, demonstrating Reddit's continued ability to expand its user base both domestically and internationally.

In addition to user growth, Reddit has significantly increased its revenue per user over the past year.

In Q2 2025, the average U.S. user generated $7.87 in revenue per quarter. By Q2 2026, that figure had increased to $11.85, representing more than 50% year-over-year growth.

International users generated an average of $1.73 per quarter in Q2 2025, compared with $2.26 in Q2 2026, representing more than 30% year-over-year growth.

As more people use Reddit, become invested in their communities, and spend more time on the platform, Reddit becomes increasingly valuable to advertisers. This creates an opportunity for revenue per user to continue increasing as the company improves its monetization.

The underlying cycle is straightforward: more users, better monetization, better recommendations, and higher conversions.

Evercore currently estimates that Meta generates approximately $100 per quarter in revenue per U.S. user. Based on Reddit's current U.S. revenue per user of $11.85 per quarter, Reddit generates only about one-eighth of what Meta generates from its U.S. users.

If Reddit can eventually reach even one-quarter, one-third, or one-half of Meta's current revenue per U.S. user, the company could have substantial additional upside from monetization alone. This potential exists alongside Reddit's continued user growth, with its user base expanding quarter after quarter and year after year.

Reddit’s Advertising Evolution and Monetization Potential

Reddit rolled out Reddit Max in September 2026 and recently made it generally available to all advertisers. Reddit is still relatively early in its monetization journey and has not yet reached the level of advertising performance and optimization that many competitors, including Google, Amazon, and Meta, have achieved.

Here are some of the biggest improvements Reddit Max has introduced for advertisers:

1. AI-Powered Campaign Automation

Reddit Max uses AI-powered campaign automation to help advertisers manage their campaigns more effectively. This includes automatically adjusting bids, budgets, audiences, and creative testing, reducing the need for advertisers to manage these settings manually.

2. Better Audience Targeting

Historically, Reddit has been somewhat weaker at targeting the correct audiences. However, its targeting capabilities are becoming more precise through scalable advertising audiences and AI-driven data analysis that can better match advertisements to Reddit's communities and subreddits.

3. Creative Optimization and Scalability

Previously, many advertising adjustments, including headline editing, image rotation, and video formatting, had to be completed manually by advertisers. This could result in underperforming advertisements remaining active without being identified or corrected.

Reddit's optimization engine can now automatically make many of these adjustments, helping advertisers improve creative performance and scale their campaigns more efficiently.

4. Better Performance Measurement and Transparency

Reddit is improving the metrics, key performance indicators (KPIs), research, and reporting available to advertisers across its platform. These improvements give advertisers better insights into purchasing decisions, leads, app activity, clicks, engagement, and attrition, helping them evaluate campaign performance more effectively.

5. Easier Adoption for Larger Advertisers and Agencies

Reddit's advertising API now integrates with Smartly, a third-party advertising management platform. This integration gives more advertisers and agencies access to Reddit's advertising ecosystem and provides additional resources for managing and scaling campaigns on the platform.

Overall, I believe these improvements are important because Reddit is still developing its advertising capabilities. As the platform improves its automation, targeting, creative optimization, measurement, and accessibility for larger advertisers, it has an opportunity to improve advertising performance and generate more revenue from its growing user base.

Revenue Growth and Margin Expansion

Reddit grew revenue by just over 60% year over year in its most recent quarter, Q2 2026. Revenue reached $805 million for the quarter, bringing total revenue over the last 12 months to $2.78 billion.

Profitability metrics also showed significant growth, with net income increasing 183%, free cash flow increasing 135%, and earnings per share (EPS) increasing 177% year over year.

Reddit generated $216 million in free cash flow in its most recent quarter and just over $1.02 billion in free cash flow over the last 12 months. These figures demonstrate the company's ability to translate its revenue growth into substantial cash generation.

Reddit's margins are also expanding. In Q2 2025, its gross margin was 90.81%, compared with 91.27% in Q2 2026. Operating margin increased from 13.55% to 28.79%, while profit margin increased from 17.87% to 31.41% over the same period.

In a nutshell, as Reddit reaches scale, it is becoming more profitable, not less.

For example, according to Reddit's annual 10-K filings, the company had 2,233 full-time employees at the end of 2024. By the end of 2025, that number had increased by 14.42% to 2,555 employees.

Reddit's revenue growth and profitability growth are clearly outpacing its employee growth. As the company reaches scale, it does not need to hire employees at nearly the same rate at which it can increase monetization and grow its user base.

I believe this operating leverage is an important part of the investment thesis. If Reddit can continue growing revenue substantially faster than its operating expenses, it has the potential to expand margins and increase profitability as the business scales.

Balance Sheet and Share Repurchases

In the most recent quarter, Reddit had $2.79 billion in cash on hand and zero debt. The company has no debt obligations weighing it down and is sitting on nearly $3 billion in cash, which represents more than 10% of its market capitalization as of October 27, 2026, the date I am writing this.

Additionally, Reddit announced a $1 billion share repurchase program this year. I believe the company could increase the size of this program over time as it becomes more profitable. If the shares remain cheap, Reddit could potentially expand the program within the next couple of quarters. This is my estimate and has not been confirmed by management.

AI Licensing Revenue

This is where we start to get into a bit of speculation. I want to clarify that I do not have access to the terms of these deals, and no one truly knows what they will be worth other than Reddit itself and the partners it is negotiating with, such as Google, Anthropic, and OpenAI.

However, the vast majority of analysts appear to have consistent expectations that AI licensing revenue will be significantly higher when these deals are renegotiated in the coming months and years.

Google announced its AI licensing deal with Reddit in February 2024, and OpenAI announced its licensing deal in March 2024. Anthropic does not currently have an AI licensing deal with Reddit and is involved in ongoing litigation with the company. A court ruling allowing Reddit's lawsuit to proceed has increased the possibility of a settlement. That said, none of this is guaranteed. These figures are estimates, and we will not know the final terms until the outcomes become clear in the coming months and years.

That said, I believe AI licensing revenue represents a significant opportunity for Reddit.

In the photo below, I will include a breakdown of Reddit's revenue by type. You will see advertising revenue and other revenue. The other revenue category includes Reddit's AI data licensing revenue. Over the last 12 months, Reddit has generated approximately $150 million in other revenue, which I believe primarily reflects its AI licensing revenue.

My personal belief is that when the Google and OpenAI deals are renegotiated in the coming months and years, their value could be significantly higher than $150 million per year combined. If other companies, including Anthropic and other players in the AI space, enter into licensing agreements with Reddit, the opportunity could increase further.

Regardless of the final negotiated amounts, I believe these deals could become substantially more valuable because data is becoming increasingly important as human-written content becomes more scarce. As a result, Reddit may be able to charge more for access to its data and establish a more premium position in the market.

Reddit's management team appears to recognize this opportunity and has taken active steps to restrict public access to its data. For example, as of the time of writing, Reddit has announced changes involving RSS feeds, public API access, and access to Old Reddit. The planned restrictions include the removal of RSS feeds on November 13, 2026, restrictions on public API access by March 2027, and limits on Old Reddit access for newer users.

The days of Reddit freely distributing its data are becoming less common. I find it difficult to believe that major AI companies will simply walk away from one of the largest sources of human-written content in the world. Companies such as Anthropic, which have been able to scrape publicly available content, may face greater restrictions on access and could eventually have to pay a premium for licensed data.

My thesis is simple: Will major AI players and their large language models (LLMs) ignore one of the world's largest sources of human-written content? Will these models forgo billions of comments, posts, and other forms of human-generated content that could be valuable for training, reference, recommendations, and advertising-related applications?

I highly doubt it.

I believe this information is extremely valuable to advertisers and AI companies alike. As Google adapts to the AI landscape and newer frontier companies such as OpenAI and Anthropic seek to scale their businesses and potentially go public, I think it is only a matter of time before they begin paying two, three, five, or potentially even ten times what they pay Reddit today for AI licensing, assuming they are currently paying for comparable access.

While I do not have the exact metrics to quantify this, I also believe Reddit's AI licensing revenue could carry higher margins than its core advertising business. Selling access to data does not appear to require nearly the same level of capital investment or employee resources as operating and continually improving a large-scale advertising business. If licensing revenue grows substantially without requiring a proportional increase in operating expenses, it could contribute disproportionately to Reddit's profitability and free cash flow.

Company Valuation

According to analyst consensus estimates, Reddit is projected to generate earnings per share (EPS) of $5.39 in 2026, $7.11 in 2027, and $8.93 in 2028. Based on a share price of approximately $138, these estimates imply forward price-to-earnings (P/E) ratios of roughly 25.6 for 2026, 19.4 for 2027, and 15.5 for 2028.

However, Reddit has a tendency to beat earnings expectations by substantial margins. I believe analysts may be underestimating the company's future earnings potential.

For example, analysts are projecting approximately 31% EPS growth in 2027. Yet, in Q2 2026 alone, Reddit grew EPS by 177% year over year, while EPS over the last 12 months is up approximately 290%. Given these results, I believe a projected 30% earnings growth rate for 2027 could be materially understating Reddit's potential.

In my personal model, I believe Reddit could generate more than $10 in EPS in 2028, rather than the consensus estimate of $8.93. Even using the current consensus estimates, however, I believe Reddit looks inexpensive relative to its growth and profitability.

At a share price of approximately $138, Reddit has a market capitalization of around $26.5 billion. The company has generated almost exactly $1 billion in free cash flow over the last 12 months. At those levels, its price-to-free-cash-flow ratio is approximately 26.5.

That multiple is not dramatically above the broader market's average. However, Reddit is not growing at an average rate. Its free cash flow increased 135% year over year in the most recent quarter and approximately 156% over the last 12 months. In my view, a company growing its cash generation at these rates deserves to be evaluated differently from a typical business.

Based on Reddit's user trends, rising revenue per user, improving monetization, and potential AI licensing deals, I believe it is very possible that the company could generate more than $2 billion in annual free cash flow within the next year or so.

Consider what that would mean at the current market capitalization of $26.5 billion. If Reddit generated $2 billion in annual free cash flow, its price-to-free-cash-flow ratio would fall to approximately 13.3.

In my opinion, a multiple of around 13 times free cash flow would be exceptionally low for a company growing its revenue and profitability significantly faster than the average company in the market.

I believe that, based strictly on free cash flow, Reddit could generate so much cash over the next one to two years that maintaining a share price around $138 would become difficult to justify financially, assuming the company executes on its growth opportunities.

Furthermore, that scenario assumes only $2 billion in annual free cash flow within the next year or two. Looking three to five years out, I believe Reddit could potentially generate $3 billion, $4 billion, or even $5 billion in annual free cash flow, depending on execution and the ultimate value of its AI licensing agreements.

The moral of the story: Reddit has premium growth, premium profitability, and premium margins, but in my opinion, it trades at a below-average to average-at-best valuation.

Risks

Risk #1: Rapid Changes in AI, Distribution, and Communication

In an ever-changing world of AI, the ways people distribute, communicate, and consume content are constantly evolving. Reddit could end up on the negative side of these changes if communication and distribution channels change rapidly.

Risk #2: Stagnating Monetization Improvements

While I believe this is the lower risk, Reddit's monetization improvements could stagnate or lag behind those of its peers. If Reddit fails to capitalize on its massive amount of data and written content, or if it cannot translate that content into considerable advertising conversions, its revenue per user could slow or stagnate.

Risk #3: Legal and Regulatory Risk

Although Reddit operates as a walled garden, regulatory changes could limit its ability to collect and track data for its models, potentially hurting its monetization rates.

Additionally, lawsuits from companies such as Anthropic could result in unfavorable outcomes for Reddit, potentially affecting its AI licensing deals with Anthropic as well as its agreements with other major partners, including Google and OpenAI.

Risk #4: Synthetic Data and AI-Generated Content

In my opinion, one of Reddit's biggest risks is that synthetic data, meaning AI-generated content, could overtake the platform and undermine the originality of Reddit's content.

Reddit's platform is seen as human, authentic, and genuine. If AI bots take over the platform, they could damage the user experience and undermine one of Reddit's core differentiators. This could create significant downside risk for the business.

Conclusion & Price Targets

Conclusion

Reddit is a unique and compelling platform that I believe is a second-order beneficiary of the AI wave. Its business model and financials are attractive for long-term shareholders, and its valuation is heavily skewed in shareholders' favor, assuming the company executes on its opportunities.

I believe the risks are relatively low compared with the potential upside and the predictability of Reddit's future growth.

In conclusion, I am long Reddit and consider it a compelling investment opportunity. I view Reddit as a strong buy for 2026.

2027 Year-End Price Targets

My year-end 2027 price targets are as follows:

Bear Case: $200 per Share

If AI licensing deals fall through or user growth slows, a bear-case price of around $200 per share next year is absolutely possible.

Base Case: $250 per Share

At a share price of $250, based on today's current shares outstanding, Reddit would have a market capitalization of approximately $48 billion.

I believe Reddit could generate around $2 billion in free cash flow in calendar year 2027. If that happens, the company would trade at approximately 24 times price-to-free-cash flow at a $250 share price.

I believe this is a more than reasonable valuation for a company growing at Reddit's rate, with its margins, fundamentals, and additional upside opportunities.

Bull Case: $300 per Share

If AI licensing deals and revenue come in above analyst expectations, and user and EPS growth do not slow nearly as much as analysts currently estimate, Reddit could have significant upside.

Instead of generating the consensus estimate of $7.11 in EPS in 2027, Reddit could potentially generate a much higher figure, such as $7.58 or $8.50. Under that scenario, I believe the company could easily see a rerating to $300 or more per share.

That may seem far-fetched at the moment, but I would not be surprised if Reddit's results come in above expectations.

2030 Price Target: $500 per Share

My final price target is $500 per share by 2030.

At $500 per share, Reddit would have a market capitalization of approximately $100 billion, or slightly less, based on today's shares outstanding.

I believe Reddit could be generating somewhere between $4 billion and $6 billion in annual free cash flow by 2030, assuming current trends remain relatively consistent. Even if growth rates regress over time, I believe generating $4 billion to $6 billion in annual free cash flow is absolutely possible.

At that level of cash generation, even a price-to-free-cash-flow multiple reasonably close to the broader market average could support a long-term share price of $500.