• Reddit previously signed a roughly US$60 million-per-year agreement allowing Google to use its content for AI training, and is now reportedly weighing whether to renew or restrict that access as the deal nears expiration.
• This reassessment highlights how Reddit and other publishers are rethinking the value of their data as AI-driven search features may reduce referral traffic to their platforms.
• Next, we’ll examine how possible changes to Reddit’s Google AI licensing arrangement could affect its investment narrative and future revenue mix.

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Reddit Investment Narrative Recap

To own Reddit, you have to believe its blend of community-driven content, targeted ads, and high-margin data licensing can support durable earnings, even as user behavior and AI search evolve. The Google AI licensing talks matter mainly for the short term because they touch both on a high-profile revenue stream and on the risk that AI search could siphon off traffic, but the deal size is still small compared with Reddit’s overall business.

Against that backdrop, Reddit’s growing web of data and ad partnerships, such as the Nectar Social and other Official Data Partner agreements, looks especially relevant. These deals show Reddit continuing to monetize its content corpus through multiple enterprise channels, which could partly offset any change in terms with Google and help support the data-licensing and advertising catalysts investors are watching most closely.

Yet for all the enthusiasm around Reddit’s data deals, investors should also be aware that growing AI use raises fresh questions about content quality and moderation risks that...

Reddit’s narrative projects $5.6 billion revenue and $1.9 billion earnings by 2029.

Uncover how Reddit's forecasts yield a $224.92 fair value, a 21% upside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts were penciling in around US$6.3 billion in revenue and US$2.4 billion in earnings by 2029, so if AI licensing economics or traffic patterns shift meaningfully, those upbeat expectations and your own view of Reddit’s upside could both look very different.

Explore 20 other fair value estimates on Reddit - why the stock might be worth as much as 90% more than the current price!

The Verdict Is Yours

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Reddit research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Reddit research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Reddit's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.