Top 10 Stocks to Buy According to Think Investments

4. Reddit, Inc. (NYSE:RDDT)

Number of Hedge Fund Holders as of Q4: 87

Think Investments’ Equity Stake: $39.72 Million 

Reddit, Inc. (NYSE:RDDT) operates as an American social media platform by the same name, which is known for its user-driven content aggregation and community forums. The platform allows registered members to submit posts in the form of links, text, images, and video media, which are then upvoted or downvoted by other users based on their usefulness or popularity. The platform is structured around topic-specific communities called subreddits, fostering a wide range of discussions across various interests. Reddit, Inc. (NYSE:RDDT) went public in March of 2024, with the company and its shareholders raising about $750 million from its initial public offering.

In its fourth-quarter earnings report, Reddit, Inc. (NYSE:RDDT) reported strong financial performance, with revenue rising 71% year-over-year to $427.7 million, exceeding analysts’ expectations. Net income for Q4 also surged to $71 million, a tremendous increase from $18.5 million in the same quarter last year, reflecting significant profitability. Despite these financial gains, Reddit’s user growth missed analyst expectations, with daily active users reaching 101.7 million instead of the anticipated 103.24 million. Nevertheless, this still represented a sound 39% year-over-year growth in user engagement.

Reddit, Inc. (NYSE:RDDT)’s projections for the first quarter of 2025 remain optimistic, with expected revenue ranging between $360 million and $370 million. This guidance significantly surpasses the $243 million reported in the same period last year and indicates continued growth momentum. While the earnings report highlighted Reddit’s strong financial performance, the shortfall in user growth dampened investor enthusiasm, leading to a decline in the company’s stock during after-hours trading.

For a stock that only recently went public, Reddit, Inc. (NYSE:RDDT)’s financials are impressive, giving rise to hedge fund sentiment. By the end of Q4 2024, 87 out of 1,009 funds tracked by Insider Monkey held positions worth nearly $4.65 billion in the company, up from 52 funds in Q3. The rising institutional interest in the company highlights strong confidence in its growth potential, strengthening its position as a top stock to buy.