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Meta (META) just dropped $14.3 billion to invest in Scale AI, and it’s sending shockwaves through the tech sector. This is Meta's second-biggest acquisition ever, right behind its $19 billion WhatsApp purchase back in 2014. The move values Scale AI at a whopping $29 billion, which puts some serious perspective on what data is worth these days.
Here’s what makes this interesting for Reddit (RDDT) investors:
While Meta is investing more than $14 billion in a startup that labels data, Reddit sits on something potentially more valuable — over 1 billion posts and 16 billion comments from real people having authentic conversations about everything under the sun. B. Riley analyst Naved Khan pointed out that Reddit’s current enterprise value of around $24 billion looks “relatively cheap” when you compare it to what Meta just spent on Scale AI.
The timing couldn’t be better for Reddit, either. The company just posted killer Q1 2025 numbers with ad revenue jumping 61% to $358.6 million, and it is projecting 33% ad revenue growth this year, faster than TikTok, Instagram, or Amazon (AMZN).
But here’s the million-dollar question: If Meta is willing to pay $14.3 billion for a data labeling company, what does that mean for Reddit’s stock price when the market realizes just how valuable its data is? Let’s dive in.
Reddit’s Financial Momentum and Market Response
Reddit (RDDT) has built a reputation as the place people go for real conversations and niche communities, where user posts drive everything from breaking news to viral memes.
The stock has had quite a ride over the past year. Reddit jumped 148% in the last 52 weeks, but has pulled back about 14% so far in 2025.
Even with these ups and downs, Reddit’s financial results show solid progress. In Q1 2025, revenue climbed 61% year-over-year to $392.4 million, easily topping what analysts expected. Advertising revenue also rose 61%, and daily active uniques grew 31% to 108.1 million, showing that more advertisers and users are paying attention. The company also turned things around by posting a net profit of $26.2 million after a big loss last year, and gross margins improved to an impressive 90.5%.
Why 2025 Could Be a Breakout Year for Reddit
Reddit is having a busy year, and a lot of what’s happening could push its stock higher. When Meta announced its huge $14.3 billion deal to invest in Scale AI, it made people realize just how valuable good data has become. Analysts quickly pointed out that while Scale AI specializes in labeling data for machine learning, Reddit’s own collection — over a billion posts and 16 billion comments — offers a similarly rich, independent dataset that could be highly sought after for licensing and training next-generation models
The CVS Media Exchange partnership announced in June represents exactly the kind of strategic collaboration that can unlock Reddit’s next phase of growth. By combining CVS’s (CVS) 90 million loyalty program members with Reddit’s 108 million daily active users, brands can now target CVS shoppers directly on Reddit and track whether those ads actually drive in-store purchases. This helps prove that Reddit ads actually work, and as a result, advertisers are flocking to the platform, with performance campaigns now making up 60% of total ad spend.
Reddit also expanded their partnership with Integral Ad Science to give advertisers better ways to measure their campaigns. Companies want to know their ads are being seen by real people, and these new tools help prove that. This makes bigger brands more comfortable spending money on Reddit.
Reddit is also joining the Russell 3000 Index on June 27, 2025. This might sound boring, but it’s actually a huge deal. The Russell indexes track about $10.6 trillion in assets, which means when Reddit gets added, all the funds that follow these indexes have to buy Reddit stock. That’s automatic buying pressure that could push the stock price up.
What Wall Street Is Saying About Reddit’s Upside
For Q2 2025, Reddit expects to bring in between $410 million and $430 million in revenue. Analysts expect earnings per share to rise more than 415% to $0.19 for this quarter.
Notably, Morgan Stanley recently upgraded Reddit to “Overweight” and set a $200 price target, pointing to Reddit’s unique user and post data as a big reason for its edge in the AI space. B. Riley’s Naved Khan is even more optimistic, keeping a “Buy” rating and a $220 target. He directly links the Meta-Scale AI deal to a big jump in how valuable Reddit’s data is and its potential for new partnerships. B. Riley also notes that Reddit’s independence and its huge, growing dataset make it a strong candidate for future deals, especially as more companies look for quality data to train AI.
Across the board, analysts are positive about Reddit’s future. The 24 surveyed give it a consensus “Moderate Buy” rating, with an average price target of $149.04. That’s about 5% upside from the current price.
Conclusion
Meta’s $14.3 billion bet on Scale AI is more than just headline news, it’s a powerful signal that the market is waking up to the true value of platforms like Reddit. With its rich trove of user-driven content, growing ad partnerships, and bullish analyst outlook, Reddit is positioned as a key player in the data economy.
