Reddit shares jump 4% on Shopify integration as Q1 revenue up 69%
RDDT•Reddit shares rose 4% to $175 after its Shopify integration moved to general availability, targeting lower-funnel ad growth. The stock recovered 20% from May lows after Q1 earnings showed 69% revenue growth and strong margins, though Meta Forum competition and AI data licensing renewals pose risks.
1. Strong Q1 revenue growth and profitability
In Q1 2026, Reddit delivered 69% year-over-year revenue growth alongside robust profitability metrics, driving renewed investor confidence. This performance underpinned a 20% rebound from the stock’s May lows, highlighting strength in its core user-generated content model.
2. Shopify integration expands ad capabilities
Reddit moved its Shopify integration from test to general availability, allowing merchants to link storefronts directly to Reddit’s ad platform. This rollout is expected to enhance lower-funnel advertising effectiveness and attract a broader base of merchants seeking direct conversions.
3. AI strategy and licensing uncertainties
CEO Steve Huffman emphasized Reddit’s potential role in the AI revolution, but renewal negotiations for AI data licensing remain unsettled. These discussions could influence future revenue streams and content availability for AI training.
4. Competitive pressures and technical outlook
Meta’s Forum app launch has not derailed Reddit’s recovery, though ongoing user growth deceleration and heavy reliance on Google search traffic present headwinds. Technically, the stock’s breakout above the 20-day moving average signals a short-term bullish trend.
