Is Reddit Stock an Nvidia-Level Winner?

Key Points

• Reddit stock is up more than 60% so far this year, and it outperformed Nvidia across the stretch.

• Reddit's valuation surged in conjunction with strong sales growth, driven by data licensing for AI applications.

• Reddit looks poised to continue scoring wins with data licensing for large language model (LLM) applications.

• 10 stocks we like better than Reddit ›

Reddit (NYSE: RDDT) stock has been on a tear this year. The social media platform and news aggregator's share price has rocketed 62% higher across 2025's trading, thanks to emerging opportunities in the artificial intelligence (AI) space.

Meanwhile, Nvidia (NASDAQ: NVDA) has gained approximately 32% year to date, but is still up an incredible 678% over the last five years. Could Reddit be in the early stages of delivering an Nvidia-like run?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Image source: Getty Images.

Is Reddit stock on the verge of an incredible winning streak?

Reddit's share price has seen massive gains since its March 2024 IPO, as the company's social platform has become an increasingly popular data source for training large language models (LLMs). With its last quarterly report, Reddit reported a sales increase of 78% year over year to reach $500 million. Meanwhile, the business posted a stellar gross margin of 90.8%. The company also guided for sales to come in between $535 million and $545 million in the current quarter -- suggesting that strong sales momentum is poised to continue in the near future.

Reddit stock now has a market capitalization of roughly $49.5 billion and is valued at approximately 24 times this year's expected sales. The company's platform has become one of the top destinations for data used to train LLMs, and it looks like this will continue to be true in the near term.

While matching Nvidia's stock performance over the last year is a tall order, there are good reasons to think that Reddit is poised to keep crushing the overall market. For risk-tolerant investors seeking potentially explosive AI plays, Reddit stock looks like a worthwhile portfolio addition right now.

Should you invest $1,000 in Reddit right now?

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.