I am curious as reddit starts to commoditize their data for llm's will they also start creating data api deals for other industries.

Like quant funds would pay for real-time API access to track retail trading sentiment like WallStreetBets and macro shifts before earnings.

Also, enterprise brands could use reddit data for direct conversation archives for consumer research.

Tech giants could pull unbiased product reviews to train AI shopping agents.

Defense and intelligence agencies might use Reddit’s global posting footprint as an OSINT platform for real-time geopolitical tracking and crisis management.

Thus making a diverse set of corporate customers that would feed reddit both through public and private sector revenue streams.

Whenever I think rddt might be over valued I look at spcx and remember the market is a stupid place filled with irrational actors

Current State:

Reddit is printing $1.25 in GAAP EPS per quarter today, running software-level margins, and growing top-line revenue over 60% YoY. Yet Wall Street treats Reddit like a dusty ad platform. Why? Because institutional analysts are terrified of one thing: The Google Data Licensing Contract.

If you’ve been following the leaks, the original $60M/year flat-fee contract signed before the IPO is up for renewal/renegotiation right now. Wall Street views this as a "binary event risk" and is convinced that if Google walks, Reddit takes a massive hit.

• Reddit Doesn't Need Google to Be Filthy Profitable
  • Data licensing generated just $43 million of Reddit's $805 million in Q2 revenue. The core ad engine grew 64% YoY all on its own. Reddit is sitting on $2.8 billion in cash and generating a quarter-billion dollars in pure free cash flow every 90 days.
• Google CANNOT Afford to Lose This Data
  • Synthetic, AI-generated garbage is corrupting the open web. Real-time, human-generated conversational data is the rarest and most valuable raw material in tech right now to prevent "model collapse" and keep LLMs context-aware.
  • If Google loses access to Reddit’s structured real-time API feed, Gemini’s real-time accuracy and cultural context take an immediate hit in a competitive landscape against ChatGPT, Claude, and Llama.
• The Shift to Dynamic Pricing ($500M+ Scale)
  • The original $60M deal was a flat fee signed before token consumption exploded. Moving to dynamic, usage-based pricing (billing based on API calls, data throughput, and model training queries) changes the scale completely.
  • Because the API infrastructure is already built, a step-up to a $500M–$1B usage-based licensing model drops almost 100% straight to net income. And Reddit will never grant exclusivity—they will sell non-exclusive access to Google, OpenAI, Anthropic, and Meta simultaneously, effectively turning Reddit into the universal utility bill for the entire AI industry.

The "Twin Engine" Squeeze Coming in Q4 / Q1 2027

Right now, RDDT is priced for a worst-case scenario. When the ink dries on a multi-hundred-million-dollar dynamic pricing deal, two things happen at the same time:

1. The EPS Explosion: Baseline EPS jumps as the core ad engine compounds, and high-margin data licensing revenue flows straight to the bottom line (pushing EPS toward $8.00–$10.00+ territory).
2. The Multiple Re-Rating: Wall Street is forced to stop valuing RDDT like a social network (~35x P/E) and start pricing it like AI infrastructure (100x–150x P/E).

When an $8–$10 EPS stock gets re-rated from a 37x multiple to even a 100x multiple, you aren't looking at a modest 20% gain you're looking at a multi-bagger repricing.

Reddit is building the highest-margin data monopoly in tech and its currently at a discount.

Wall Street thinks Google holds the power in the data licensing renewal. In reality, Google needs Reddit’s human data to keep Gemini from degrading. Once the deal is renewed on dynamic pricing terms, RDDT gets an instant EPS bump and an institutional multiple re-rating from ad-tech to AI infrastructure.

Another earnings beat, another 12% after hours dump down to $155.

Q2 numbers were ridiculously strong across the board:

• Revenue: $805M, up 61% YoY
• Free Cash Flow: $261M (~32% FCF margin)
• Gross Margin: 91.3% with zero debt
• Users: WAUq crossed 514 million (+24% YoY)

Yet we tanked it anyway on the exact same recycled "Google AI search will steal referral traffic" bear case we've heard for a year.

The structural issue here isn't the business but market structure. We’ve been sitting around for over five quarters waiting on the S&P Index Committee to grant an index slot. But the S&P committee is discretionary, slow, and under no pressure to add another comm services stock when Meta and Alphabet already swallow that sector's weighting. Sitting in index limbo leaves the float completely exposed to pod shops and post-earnings algo dumps.

Huffman and management need to pull a Palantir and transfer the primary listing from the NYSE to NASDAQ. Unlike the S&P, the NASDAQ isn't run by a human committee debating vibes in a closed room. It’s rules based.

This puts $RDDT in line for QQQ inclusion. Which forces hundreds of billions in passive index funds to buy the float, establishing a permanent structural floor under the stock that active shorts can't just smash every quarter.

Waiting on the S&P Committee to randomly grant a seat is a waste of time. Swap exchanges!