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Stocks of Reddit Surge on OpenAI Chatgpt Deal, on Pace for Biggest Gain Since March

May 17, 2024
minute read

Shares of Reddit Inc. surged 15.3% on Friday, driven by the company's newly announced partnership with OpenAI. This rise marks the stock’s largest gain since March 25, 2024, when it jumped 30%, according to Dow Jones Market Data.

The increase follows closely on the heels of Reddit’s initial public offering (IPO) on March 21. Currently trading around $65, the stock is approaching its highest close since March 26, when it ended the day at $65.11.

Reddit, identified by the ticker symbol RDDT, disclosed its partnership with OpenAI late Thursday. This collaboration will integrate Reddit’s content into OpenAI’s ChatGPT and provide OpenAI with access to Reddit’s Data API. According to Reddit, this access will enhance OpenAI’s AI tools, enabling them to better understand and display Reddit content, particularly on current topics.

Furthermore, the partnership will introduce new AI-powered features for Reddit users and moderators, and OpenAI will become a Reddit advertising partner.

This alliance was not entirely unexpected, as OpenAI’s CEO, Sam Altman, is one of Reddit’s investors.

Stocktwits, a social platform for investors and traders, expressed optimism about the partnership, stating, "WOAH, this could be big..." on X late Thursday. They noted that while sentiment on Stocktwits is currently neutral, it is becoming more bullish.

Since its IPO, Reddit shares have risen by 28.6%.

Of the 15 analysts surveyed by FactSet, eight have given Reddit a buy rating, six have a hold rating, and one has assigned an underweight rating.

Cathy Hills
Associate Editor
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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