The Market Doesn't Understand Reddit (Cont'd)
Why Agency Checks and AI Headlines Are Masking an Emerging Monetization Inflection
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Reddit ($RDDT) shares dropped sharply (~9%) in late January 2026 after Cleveland Research’s bearish note flagged:
Slowing new advertiser adds
Hesitation from existing clients on spend ramps
Agency softness and competition from TikTok, Snap, and even AI discovery shifts (e.g., YouTube gaining in some LLM citations)
Headlines amplified fears of structural ad weakness, especially with YouTube “overtaking” Reddit in AI relevance.
But forward signals suggest the narrative is lagging reality.
Advertiser momentum and measurement tools are accelerating, not stalling, indicating resilient (and growing) demand beneath the agency noise.
AI citation concerns are overstated: While Google integrations boost YouTube in some channels, Reddit retains strong positioning in high-volume/OpenAI-driven discovery, with attribution trends favoring acceleration.
Efficiency improvements: Reddit’s new Max campaigns (beta launched Jan 5, 2026) automate optimization and address prior inefficiencies, early tests hint at meaningful ROI lifts that could drive sustained ARPU/revenue scaling, similar to past Meta/Google inflections.
Agency declines are a broader industry shift (AI internalization eating managed spend), not a Reddit-specific red flag, direct/SMB adoption appears to be the stronger, under-the-radar driver.
Consensus may be too pessimistic on near-term revenue if these inflections hold. With Q4 2025 earnings on Feb 5, 2026, this dip could prove short-lived.
The full note expands on proprietary advertiser tracking insights, detailed AI attribution breakdowns (including recent growth rates), Max campaign performance context, DAU trends, agency dynamics, and why certain macro changes plus key risks and watch points.
For access to the full note and our KPI forecasting platform, please contact admin@tickertrends.io .
TickerTrends Enterprise provides access to tracking and forecasting across 500+ public company KPIs, alongside actionable, data-driven research.
https://tickertrends.io/enterprise
The Max campaigns launch feels like one of those inflection moments people miss until it's obvious in retrospect. I saw somethign similar with Meta when they rolled out broad targeting back in 2019, everyone was skeptical until ROI data made it undeniable. The agency noise is real but honestly, agencies are losing ground to inhouse teams everywhere, not just with Reddit. If direct and SMB adoption is growing underneath that surface churn, thats where the actual momentum lives.