12 Best Young Stocks To Buy and Hold For 10 Years

2. Reddit Inc. (NYSE:RDDT)

3-Year CAGR as of February 11: 40.89% 

Number of Hedge Fund Holders: 52

Reddit Inc. (NYSE:RDDT) operates a website that organizes digital communities based on specific user interests. These communities allow users to engage in conversations by sharing experiences, links, images, and videos.

The company made $315.1 million from its advertising segment in Q3 2024. That’s a 56% increase year-over-year. It’s getting more ad views because it has more users and its ads are placed more effectively, which is driven by something called the “conversation placement ads.” These ads appear within or alongside online conversations and potentially target users based on the context of those discussions. Its ads are also performing well across the entire “sales funnel,” which means that they’re effective at attracting users at different stages of the buying process, especially those closer to making a purchase.

Reddit Inc. (NYSE:RDDT) is also working on making its ads better and easier for advertisers to use and offering unique ad formats. For example, the “conversation ads” have seen improvements in how often they lead to conversions. It’s also experimenting with putting ads in new places, like within the comments section, which could create more ad space.

JMP Securities is bullish on Reddit Inc.’s (NYSE:RDDT) advertising business, maintaining an Outperform rating and raising the price target to $190 from $160. The positive outlook for its Q4 digital advertising revenue is based on a healthy advertising market driven by strong holiday consumer spending, increased political ad spending, and improved business confidence.