Reddit stock posted a sizeable intraday gain, climbing 5.4% in morning trading as investors bought into the name following a near 9% drop earlier in the week. The earlier decline came after a report that the company was considering not renewing its approximately $60 million-per-year AI data content licensing agreement with Google, a development that had pressured sentiment around Reddit's role in the AI data licensing market.
The sell-off pushed Reddit below key technical supports and drove its Relative Strength Index toward oversold readings, a technical backdrop that some participants viewed as creating a buying opportunity after the stock's earlier losses.
Market participants point to pre-earnings positioning as a central reason for the recovery. Reddit is due to release its second-quarter 2026 financial results after the market close on July 30. Consensus expectations among analysts call for revenue of roughly $731 million to $733 million, which would represent about 47% year-over-year growth. Several brokerages have maintained positive stances in the run-up to the report, with Wedbush, Jefferies, and Piper Sandler among those reiterating constructive ratings during July. The street-average price target stands near $221.
Alongside the Google relationship, Reddit continues to hold a separate data licensing arrangement with OpenAI. Reddit's chief executive, Steve Huffman, has publicly indicated an intention to pursue higher, usage-based pricing for both the Google and OpenAI deals when they come up for renewal in 2027, signaling management's preference to shift toward pricing tied to actual data usage on future contract terms.
Broader market strength also supported the move in Reddit shares. During the session the S&P 500 rose 0.6%, the Dow Jones Industrial Average gained 1.0%, and the Nasdaq Composite increased 0.8%. Investors remain focused on a busy macroeconomic calendar this week, which includes June durable goods orders released during the day and a Federal Reserve rate decision plus second-quarter GDP data scheduled later in the week. Those events have kept attention on macro risk but have not muted early risk appetite in trading.
In sum, today's recovery in Reddit stock appears to reflect a combination of technical factors following an oversold swing, investor positioning ahead of the company's upcoming earnings release, and a favorable market backdrop. The unresolved status of the Google licensing discussions, however, remains an outstanding source of uncertainty that may contribute to continued volatility as the company approaches its earnings report.