It Appears Reddit is on the Verge of a Breakout to All-time Highs, Based on the Charts

Reddit has come a long way from its roots as a rough-around-the-edges message board to becoming a data-rich platform with immense value for advertisers and investors alike. Earlier today, before finishing this article, I reluctantly added the stock to our Active Opps portfolio, as price action suggests a potential breakout through the $230–$250 resistance zone. I’ll share why I hesitated at the end.

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The company’s growth story is gaining momentum. Reddit isn’t just expanding its weekly active user base it’s also ramping up its advertising engine. In the second quarter, advertising revenue hit $465 million, a jump of 84% compared to the prior year. The platform continues to enhance its ad-tech capabilities, giving marketers advanced tools to connect with highly specific audiences.

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Because Reddit’s content is user-generated, well-structured, and searchable with AI-driven programs, advertisers are able to target communities with precision. Notably, ads haven’t been seen to disrupt or diminish the overall user experience a critical point for long-term engagement.

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From a financial standpoint, Reddit is steadily moving toward profitability. For 2024, GAAP earnings per share (EPS) registered a loss of $3.33. However, projections show a turnaround to positive EPS of $1.87 in 2025, rising further to $3.08 in 2026. On a non-GAAP basis, the outlook is even stronger: $2.45 per share in 2024, climbing to $4.03 in 2025 (a 64.3% increase), then to $5.08 in 2026 (a 25.9% gain), and reaching $6.58 by 2027 (a 29.5% growth rate).

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From a technical perspective, Reddit shares are showing signs of pressing toward all-time highs in the $230–$250 range. What stands out most is the stock’s relative strength when consolidating around the 20-day moving average. On three separate occasions, as shown on the chart, RDDT tested this line and found support.

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While many traders look to the 50- or 200-day moving averages, the 20-day has proven to be more telling here. It’s a faster-moving gauge, yet Reddit’s stock has used it as a reliable springboard after short periods of sideways action. We’re now finishing a roughly 12-session stretch of choppy trading at that level, and buyers appear ready to step in, potentially driving a breakout past resistance.

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Based on these signals, I initiated a 3% allocation to RDDT in our Active Opps portfolio for Inside Edge Capital clients today.

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This investment marks a turning point for Reddit as a company. It has matured beyond its reputation as a meme-stock playground. I recall an April 2022 appearance on CNBC’s “Power Lunch,” where I cautioned investors against meme names, singling out Bed Bath & Beyond (BBBY) after activist investor Ryan Cohen’s involvement made headlines.

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The backlash on Reddit was fierce I was hit with more than 800 comments criticizing my take and even my credibility as an investor. Yet, two years later, BBBY shares had lost more than 90% of their value.

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Now, I can’t help but wonder what reaction my bullish view on Reddit will spark on those same boards. The irony isn’t lost on me the very community that once ridiculed the idea of caution now represents the foundation of a company with real staying power and a clear growth path.

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At Inside Edge Capital, we continue to provide active portfolio management and regular updates for our subscribers, including opportunities like the one highlighted today. Reddit may have started as an underground forum, but today it looks more like a maturing tech stock with a compelling investment case.

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