Why I Went All In on RDDT
Reddit sits where the internet actually decides things. It turns questions into purchases, curiosity into action, and threads into a data asset AI companies can’t stop calling.
TL;DR: Reddit doesn’t just sell attention — it sells decisions. Ads ride high-intent communities, and data licensing monetizes a uniquely human conversation graph. High gross margins add leverage. That’s a combo worth a dramatic portfolio entrance.
The Core Idea (a.k.a. “Why this one’s a keeper”)
Reddit is the internet’s “show-your-work” layer. People ask, compare, argue, and then buy — in public. That means conversion-friendly context for advertisers and an ever-growing dataset of real questions and real answers. The kind of “receipts” AI models crave.
Where the Money Actually Comes From
1) Ads built around intent (not just eyeballs)
- Subreddit-level targeting hits niche audiences exactly where they’re deciding.
- Recent quarters: breakout ad growth as formats and tools sharpen.
Competitor subtweet: TikTok sells dopamine; Reddit sells decisions. Different checkout button.
2) Premium & paid experiences
- Ad-free and perks add a steady, high-margin layer without reinventing the feed.
3) Data licensing to AI (the spicy tailwind)
- Existing deals include Google (≈$60M/yr). OpenAI is widely estimated around ≈$70M/yr. Together, AI/data licensing has been running ~7–10% of revenue recently — small, but very high margin with room to scale.
- Reddit defends the asset (see actions against unauthorized scraping). The message: pay for the good stuff.
Translation: even modest execution wins can boost revenue per user without needing infinite doomscroll time.
Handling Your F. Planner's Raised Eyebrows
- “Just buy the index.” Respectfully, that’s like ordering plain oatmeal at brunch. Great macros, zero swagger. RDDT is the upgrade with fruit, honey, and a side of optionality.
- Meta: masters of attention. Reddit: master of intention. One optimizes for scrolling; the other for choosing.
- X: like a cafeteria food fight. Reddit: more like a seminar where someone actually did the reading.
- Search engines: even they add “reddit” to get real answers. If the librarians are citing the group chat, the group chat is winning.
Risks (eyes open, jokes aside)
- Ad cyclicality: brand budgets can wobble with the macro.
- Community governance: push too hard, users/mods push back.
- Licensing volatility: AI/data revenue is newer; partners and policies evolve.
What to Watch Next
- Ad platform performance: targeting precision, formats, return on ad spend.
- AI/data deals: breadth of partners, contract sizes, productization.
- Engagement quality: healthy DAUs, time-in-subreddit, signal-to-noise.
Bottom line: RDDT monetizes decisions today and the knowledge graph underneath them tomorrow. Community gravity + high margins = a thesis with main-character energy.
Note: Opinion only, not investment advice. Do independent research and size risk responsibly.
