Investment firm D.A. Davidson assigned a buy rating to Reddit on April 21, 2026 [1].
This move signals a shift in investor confidence regarding the social media platform's ability to monetize its content in the age of generative AI. As platforms struggle to maintain growth, the focus has shifted to how companies can leverage their data as a training set for large-language models.
According to D.A. Davidson, Reddit has several options to increase revenue [1]. The firm said that these opportunities include renegotiating its content-licensing deals with large-language models [1].
"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," D.A. Davidson said [1].
While the stock has struggled this year [1], the investment firm believes the platform is well-positioned for a long-term recovery. The analyst's recommendation suggests that the platform's value is not just in its community forums, but in the data it hosts.
Reddit continues to operate as a primary source of human-like conversation and natural language data, which is essential for the development of AI models. By renegotiating the terms of these licenses, the company can create new, high-margin revenue streams that are less dependent on traditional advertising revenue.
“Reddit has several options to squeeze more dollars out of the business”
The shift toward content-licensing deals represents a pivot from traditional social media monetization. By treating its data as a product for AI companies rather than than just a platform for advertisers, Reddit is attempting to diversify its revenue sources to reduce reliance on the volatile advertising market.
