{"id":28092,"date":"2026-05-05T14:59:50","date_gmt":"2026-05-05T14:59:50","guid":{"rendered":"https:\/\/www.europesays.com\/ai\/28092\/"},"modified":"2026-05-05T14:59:50","modified_gmt":"2026-05-05T14:59:50","slug":"reddit-ceo-delivers-bold-warning-to-google-and-openai","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ai\/28092\/","title":{"rendered":"Reddit CEO delivers bold warning to Google and OpenAI"},"content":{"rendered":"\n

Reddit CEO Steve Huffman had a message for the AI<\/a> giants on the company’s first-quarter 2026 earnings call<\/a>. And it wasn’t subtle.<\/p>\n

“There is no artificial intelligence without actual intelligence. And that comes from Reddit,” Huffman<\/a> said.<\/p>\n

That single line landed like a warning shot, aimed squarely at Google and OpenAI, two of Reddit’s (RDDT<\/a>) most important licensing partners.<\/p>\n

And given what the platform reported for the quarter, Huffman had every reason to say it with confidence.<\/p>\n

Reddit’s Q1 numbers were solid <\/p>\n

Valued at amarket cap<\/a> of $32 billion, Reddit stock went public in March 2024 at $34 per share, CNBC<\/a> noted. Today, the social media stock trades around $166.<\/p>\n

In Q1 of 2206, it reported:<\/p>\n

Revenue<\/a> of $663 million, up 69% year over year and above consensus estimates of $611 million, as indicated by CNBC<\/a>.<\/p>\n

Net income<\/a> of $204 million or $1.01 per share, beating estimates by $0.43 per share, CNBC reported<\/a>.<\/p>\n

In the year-ago period, RDDT reported<\/a>adjusted earnings of $0.13 per share.<\/p>\n

It also marked Reddit’s seventh straight quarter<\/a> of revenue growth above 60%.<\/p>\n

The company posted<\/a> a 91.5% gross margin and a 40%<\/a> adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, both rare metrics for a company growing this fast.<\/p>\n

Free cash flow margin<\/a> rose to 47%, while it allocated<\/a> just $1 million towards capital expenditures, showcasing its asset-light business model.<\/p>\n

Reddit also raised its guidance. For the second quarter of 2026<\/a>, the company is projecting revenue of $715 million to $725 million, ahead of the $712 million analysts had penciled in.<\/p>\n

Related: Young Adults Rely on Social Media for Financial Advice<\/a><\/p>\n

Adjusted EBITDA<\/a> is expected to land between $285 million and $295 million, also above estimates.<\/p>\n

RDDT stock rose 8% in the past week and 43% in the last 12 months.<\/p>\n

Why Google and OpenAI should pay attention <\/p>\n

Reddit’s financial strength is a story about data and who controls it.<\/p>\n

Huffman made it clear on the call that Reddit’s 20-plus years of human conversations, totaling more than 25 billion<\/a> posts and comments, are a key part of the infrastructure for the AI era.<\/p>\n

“Reddit’s conversations are like oil for the modern internet,” Huffman<\/a> said \u2014 a foundational resource that AI models depend on to learn, reason, and generate responses.<\/p>\n

Reddit currently has licensing deals with both Google and OpenAI.<\/p>\n

One analyst on the call noted that those deals<\/a> appear to be worth between $50 million and $60 million annually and questioned whether that’s nearly enough, given Reddit’s growing importance to AI development.<\/p>\n

Huffman largely agreed with the premise. When asked about the upcoming 2027 renewals for those partnerships, he stopped short of naming figures.<\/p>\n

But his message was clear: The world can see that Reddit’s data is valuable, and so can its partners.<\/p>\n

He also declined to rule out exclusive arrangements. When asked whether an exclusive deal with one AI company might make sense, Huffman simply said<\/a>, “No comment.”<\/p>\n

\"Reddit's Reddit’s CEO is optimistic on the company’s AI moat.Spencer Platt&sol;Getty Images Reddit aims to expand its user base <\/p>\n

For all the earnings momentum, Huffman was candid about where Reddit is still falling short.<\/p>\n

The platform<\/a> has roughly 500 million weekly users globally, including 200 million in the United States.<\/p>\n

But daily active users<\/a> (DAUs) in the U.S. sit at around 50 million. Huffman’s stated goal is to reach 100 million U.S. DAUs, and he called it the company’s top internal priority.<\/p>\n

If 200 million Americans use Reddit each week but only 50 million show up daily, the conversion opportunity is enormous.<\/p>\n

The challenge is getting occasional visitors to come back every day.<\/p>\n

Huffman pointed to three main levers: better onboarding for new users, a faster app on both iOS and Android, and a smarter content feed powered by machine learning.<\/p>\n

He’s been bringing in experienced talent from platforms that have already cracked the daily engagement code, and he believes Reddit is on a similar path.<\/p>\n

More Tech Stocks: <\/p>\n

Search weekly active users (WAUs) are up<\/a>30% year over year, and the team has rolled out an AI-powered answer feature that can now compare products, pull relevant links, and behave more like an intelligent assistant than a keyword tool.<\/p>\n

On the advertising side, Reddit’s new automated campaign tool, Reddit Max, is gaining traction fast.<\/p>\n

Advertisers<\/a> using it are seeing an average 17% drop in cost per action and 25% higher conversion rates.<\/p>\n

About half of Max campaign users are also adopting AI-powered creative tools, a sign that automation is landing well with the advertiser base.<\/p>\n

Active advertisers<\/a> grew by more than 75% year over year, significantly diversifying the revenue base.<\/p>\n

What is the RDDT stock price target? <\/p>\n

Analysts tracking Reddit<\/a>forecast revenue to increase from $2.20 billion in 2025 to $7.75 billion in 2030. In this period, free cash flow<\/a> is projected to expand from $680 million to $3.15 billion.<\/p>\n

If RDDT stock<\/a> is priced at 25x forward FCF, which is below its 1-year average of 40x, it should gain 150% over the next 4 years.<\/p>\n

Out of the 24 analysts<\/a> covering RDDT stock, 14 recommend \u201cbuy,\u201d nine recommend \u201chold,\u201d and one recommends \u201csell\u201d. The average Reddit stock price target<\/a> is $222, indicating a 33% upside from current levels.<\/p>\n

Reddit’s momentum is real. The question now is whether its AI partners will pay what that momentum is worth.<\/p>\n

Related: Reddit insider sends major vote of confidence after earnings<\/a><\/p>\n

This story was originally published by TheStreet<\/a> on May 4, 2026, where it first appeared in the Investing<\/a> section. Add TheStreet as a Preferred Source by clicking here.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Reddit CEO Steve Huffman had a message for the AI giants on the company’s first-quarter 2026 earnings call.…\n","protected":false},"author":2,"featured_media":28093,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[132,157,8796,18592],"class_list":{"0":"post-28092","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-openai","8":"tag-google","9":"tag-openai","10":"tag-reddit","11":"tag-steve-huffman"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/28092","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=28092"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/28092\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/28093"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=28092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=28092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=28092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}