Reddit (RDDT) Is Joining the S&P 500 —What’s Next for the Company?

Angelica Ballesteros Sat, August 15, 2026 at 1:47 AM EDT 3 min read **

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Reddit Inc. (NYSE:RDDT) saw its share price climb by 12.63 percent on Friday to close at $178.09 apiece following announcements that it would join the S&P 500 beginning next week.

In an updated report on Thursday, the S&P Dow Jones Indices said that Reddit Inc. (NYSE:RDDT) is set to become a member of the index beginning Tuesday, August 18, replacing AvalonBay Communities, which is set to be acquired by Equity Residential—also an S&P 500 constituent.

"We're proud to be added to the S&P 500, recognizing the growth, momentum, and consistency we've established as a public company," Chief Finance Officer Drew Vollero said.

Photo by Brett Jordan on Pexels

"Reddit's raw materials are special, and there is so much potential to continue building great products and scaling profitably. Our focus remains on executing against the many opportunities ahead," he noted.

Companies being added to benchmark indices typically see a significant jump in their share prices, as funds mirroring their composition are required to rebalance their portfolios.

Its membership marks a significant milestone as it could help boost its exposure to funds and global investors.

Strong Q2**

The addition followed Reddit Inc.'s (NYSE:RDDT) strong earnings performance in the second quarter of the year, with revenues marking its 8th consecutive quarter of growth.

During the period, net profits more than doubled to $253 million from only $89 million in the same period last year, while revenues increased by 61 percent to $805 million from $500 million year-on-year.

The total revenues were driven by a 64-percent jump in ad revenues of $762 million, coupled with a 24-percent improvement in other revenues at $43 million.

Moderate Buy

Reddit Inc. (NYSE:RDDT) currently holds a moderate buy rating from 23 analysts.

Of the three most recent coverages about the company this month, Phillip Securities issued the most bullish stance, assigning a buy call with a price target of $230, or a 29 percent upside potential from its latest closing price.

Meanwhile, JPMorgan and Roth MKM both issued hold ratings, with price targets of $185 and $145, respectively.

Hedge Fund Sentiment Weakens

Institutional investors appeared to be more cautious over Reddit Inc.'s (NYSE:RDDT) long-term growth prospects amid a marked decline in both the number of hedge funds owning the stock and combined holdings.

Data from Insider Monkey showed that 70 hedge funds held positions in the company as of the first quarter of the year, down from 82 in the fourth quarter of 2025.

** Story Continues More importantly, conviction fell sharply by 46 percent to $2.86 billion from $5.29 billion quarter-on-quarter, signaling that professional investors were not only exiting the firm, but also limiting their committed funds.

As the said data predate Reddit Inc.'s (NYSE:RDDT) inclusion in the S&P 500, the third quarter will particularly be a crucial indicator on institutional sentiment, on whether its addition to the index has been strong enough to gain hedge fund backing.

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