10 Stocks with Potential to Explode in 2025

2. Reddit, Inc. (NYSE:RDDT)

Average Upside Potential: ~91%

Number of Hedge Fund Holders: 87

Reddit, Inc. (NYSE:RDDT) operates a digital community in the US and internationally. The company’s investments in AI and ML can fuel future growth throughout multiple aspects of its business. Talking about user engagement, AI-powered features such as Reddit Answers, and better content recommendation algorithms are expected to improve user experience, resulting in higher time spent on the platform and increased retention rates. Therefore, the enhanced engagement can make Reddit, Inc. (NYSE:RDDT) more attractive to advertisers.

Furthermore, the company continues to leverage machine translation technology in a bid to expand its reach.  This international push is expected to fuel strong user growth and engagement in the coming years. Reddit, Inc. (NYSE:RDDT) continues to roll out new ad formats as well as tools to attract advertisers and improve ad performance. These consist of dynamic product ads, video ads, and improved targeting capabilities.  Furthermore, the expansion of its direct sales efforts and improving the self-serve advertising platform can aid adoption.

Columbia Threadneedle Investments, an investment management company released its Q4 2024 investor letter. Here is what the fund said:

“Reddit, Inc. (NYSE:RDDT) was the single best-performing stock for the fund, as the stock surged during the quarter, with significant outperformance following its stellar quarterly earnings release. The capital-light social news aggregation platform — and the ninth most-visited website in the world — reported quarterly revenue, user growth and profit margins that came in considerably higher than even the most bullish of estimates, and the company also provided forward-looking guidance that came in well ahead of expectations on most metrics. After earlier announcing a data licensing partnership with AI pioneer OpenAI, investors ‘up-voted’ the evolving AI narrative for Reddit after gaining a better understanding of its unique and hard-to-replicate trove of content generated by its growing and increasingly global user base.”