Reddit Inc. is grappling with significant legal troubles following a federal judge's tentative order in its data scraping lawsuit against Anthropic PBC, contributing to a substantial 49.9% drop in its stock price year-to-date. Despite this turmoil, analysts maintain a 'Moderate Buy' consensus, citing strong advertising revenue growth and projections for continued earnings increases as potential lifelines. Jim Cramer expresses confidence in a recovery and plans to buy shares, even as concerns about rising regulatory scrutiny and litigation costs threaten future profitability and user engagement.
“A federal judge appeared hesitant to reverse her tentative order remanding Reddit Inc.'s lawsuit accusing Anthropic PBC of illegally scraping user posts to train its AI models.”
“A federal judge appeared hesitant to reverse her tentative order remanding Reddit Inc.'s lawsuit accusing Anthropic PBC of illegally scraping user posts to train its AI models.”
“Reddit, Inc. (NYSE:RDDT) was featured on Mad Money as Jim Cramer shared his take on the stock amid a sliding macro environment. Cramer said: Yes, Reddit went down today because of these lawsuits.”
“Cramer said: I am going to make people understand that there’s two sides to every story.”
“Cramer replied: I’d like to buy some stock right here at 27 times earnings.”
“If similar lawsuits or regulations extend to platforms like Reddit, the company may need to adjust product design, moderation tools or ad formats. These changes could influence user time spent and monetization.”
“Higher legal and compliance costs if regulators or plaintiffs apply this ruling to Reddit’s engagement tools, potentially affecting profitability.”
“Legal pressure on youth safety and addictive design could make it harder to maintain high engagement from younger users. This may challenge assumptions in the narrative about Reddit’s ability to keep growing its audience in competition with platforms such as TikTok, YouTube and Discord.”
“Reddit Inc. currently has an average brokerage recommendation (ABR) of 1.96, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 28 brokerage firms.”
“Analysts' steady views regarding the company's earnings prospects, as indicated by an unchanged consensus estimate, could be a legitimate reason for the stock to perform in line with the broader market in the near term.”
“The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Reddit Inc.”
“Reddit is down 49.9% since the beginning of the year, and at $121.29 per share, it is trading 55.2% below its 52-week high of $270.71 from September 2025.”