10 Hot Growth Stocks to Invest in According to Analysts

6. Reddit, Inc. (NYSE:RDDT)

% Gain Over 6-Month Period: ~165.1%

Average Upside Potential: ~39.3%

Number of Hedge Fund Holders: 87

Reddit, Inc. (NYSE:RDDT) operates a digital community in the US and internationally. Needham analyst Laura Martin has maintained a bullish stance on the company’s stock, offering a “Buy” rating. The analyst’s rating is backed by several favorable performance indicators demonstrated by the company’s Q4 2024 results. Reddit, Inc. (NYSE:RDDT)’s total revenue went up by 71% YoY to $427.7 million in Q4 2024, with Ad revenue rising 60% YoY to $394.5 million. As per the analyst, these metrics demonstrate a strong business model and sound monetization strategies.

Furthermore, Reddit, Inc. (NYSE:RDDT) has successfully introduced new products such as Reddit Search and Reddit Answers, which continue to improve user discovery and engagement. Its gross margin expansion and healthy FCF projections further strengthen its financial health. Also, Reddit, Inc. (NYSE:RDDT)’s strategic moves in content licensing and international user growth with the help of AI-driven language translations can act as promising avenues for potential growth. The company’s investments in AI and ML continue to hold strong promise for fueling revenue growth. Its AI-powered search improvements and content recommendation algorithms can result in improved user engagement and time spent on the platform. This can help create more opportunities for ad impressions and revenue generation.

Reddit, Inc. (NYSE:RDDT)’s AI initiatives tend to go over and above the user-facing features. Its acquisition of Memorable AI and a strong emphasis on incorporating AI/ML into the advertising platform can lead to efficient ad targeting and improved ROI for advertisers. This can potentially attract larger ad budgets from current and new clients.