Reddit stock skyrocketed more than 40% higher on Wednesday — a stunning market reaction Jim Cramer suggested was warranted given the company’s blowout third-quarter earnings results . Shares hit an all-time intraday high as investors celebrated the beat and raise that came after Tuesday’s closing bell. Since becoming publicly traded in March, Reddit has gained roughly 240% from its offering price of $34 per share. The IPO happened nearly two decades after it was founded. Cramer touted the social platform for its growth prospects around ad revenues, calling it the “holy grail” for advertisers. That’s because 30% to 60% of Reddit users are not on other social media services, making it a boon for advertisers who want to reach a larger, more unique audience. “Reddit is a place where advertisers need to be,” Steve Huffman, CEO and co-founder of Reddit, said on Tuesday’s “Mad Money.” “We also have communities, and places for people to gather for pretty much every top imaginable, which means every company’s customers are probably on Reddit somewhere.” In turn, Cramer said Reddit can join the ranks of tech giants like Meta Platforms, Amazon , and Alphabet in terms of ad dollars raked in. “This is about raw user power,” he said Wednesday on “Squawk on the Street.” “There are these verticals that [Reddit] can reach that nobody else has.” Meta, Amazon and Alphabet are each holdings in Jim Cramer’s Charitable Trust , the portfolio used by the CNBC Investing Club. Reddit also has a massive amount of user data that it can monetize to train artificial intelligence models. If you like this story, sign up for Jim Cramer’s Top 10 Morning Thoughts on the Market email newsletter for free .
Cramer on Reddit surge, calls company the ‘holy grail’ for advertisers
