Why RDDT Stock Is Climbing Today

Reddit (RDDT) stock is advancing 7% today after its COO was quoted as saying that its content is an integral part of the creation of large language models (LLM).

Other factors that may be boosting RDDT today are President Donald Trump’s decision to eliminate regulations on AI and rumors about the potential acquisition of TikTok’s U.S. business.

Analyst Upgrades Reddit (RDDT), Says They Were ‘Wrong’ About the Stock

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COO Says Reddit Is “Foundational” to AI

Reddit COO Jen Wong reportedly stated that Reddit’s content is “foundational” to the development of LLM, Business Insider reported recently. LLM are a form of AI.

RDDT already has deals to provide its data to Alphabet (GOOG,GOOGL) and OpenAI. The latter two companies use the information to train their LLM.

Trump’s Deregulation of AI and Rumors About a Potential TikTok Deal

Yesterday Trump overturned an executive order issued by former President Joe Biden. The order required some creators of AI to provide data on their safety tests to the federal government. With that rule eliminated, AI developers may be able to move faster, potentially causing them to purchase even more of RDDT’s data.

Many people and entities, including Elon Musk, Amazon (AMZN), Microsoft (MSFT), and Walmart’s (WMT) CEO have been rumored to be interested in buying TikTok’s U.S. business. The takeover chatter may be making investors believe that RDDT, which, like TikTok, is a hot social media asset, could one day also become a takeover target.

While we acknowledge the potential of RDDT, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RDDT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: The author owns shares of AMZN but has no plans to trade them in the next 48 hours. This article is originally published at Insider Monkey.