Reddit has several options to squeeze more dollars out of its businesses, including by renegotiating its content-licensing deals with large-language models, making its stock an attractive addition to investors’ portfolios, according to D.A. Davidson. The investment firm assigned a buy rating to the social media name. It also set a $200 price target on shares, implying 20.3% upside from Monday’s close. “Reddit remains incredibly under-monetized relative to peers and has positioned itself as a human-first social platform that will continue to attract more users and advertisers as it scales,” analyst Wyatt Swanson said Tuesday in a note to clients. “Reddit’s scaling should support more favorable contract renewals with the leading LLMs, a broader base of advertisers, and further operating leverage.” Reddit has highly profitable deals with Google and Open AI, according to the analyst. He noted that the social media company could soon renegotiate those agreements to boost its bottom line, which should positively impact shares of Reddit. “Despite the heightened focus on enterprise from the leading LLMs, we assume Reddit can renew LLM contracts at a 15-30% higher rate than existing deals in our base case,” Swanson wrote. Another source of upside for Reddit could be a potential settlement of its lawsuit against Anthropic, which is looking “more likely” as the AI firm prepares to debut its shares on the public market, per the analyst. Reddit sued Anthropic last year, alleging the startup scraped its user-generated content to train its Claude AI model without receiving permission or paying to access the data. The company’s recent price action also makes now a good time to scoop up shares, according to D.A. Davidson. The stock has declined nearly 28% in 2026, largely due to concerns over the social media platform’s decelerating year-over-year traffic growth and its sensitivity to macroeconomic conditions. RDDT YTD mountain Shares of Reddit have declined nearly 28% since the beginning of the year. “We believe most catalysts are likely to play out in 2H’26 and 2027, but [Reddit’s] YTD performance represents an opportunity to BUY,” Swanson wrote.
