S&P Dow Jones Indices announced late Thursday that Reddit will join the S&P 500 before trading begins on August 18.
Shares rose more than 12% in pre-market trading Friday following the announcement.
The news follows Reddit’s report of a 61% year-over-year revenue increase to $805 million in the second quarter. This growth was mainly driven by a rise in advertising income, as marketers increasingly targeted the platform’s active user communities.
Reddit joins the benchmark index, highlighting a major opportunity to leverage AI to increase advertising sales.
People frustrated with AI slop and useless AI summaries are already gravitating toward Reddit’s long, human conversations, according to the platform’s co-founder, Steve Huffman.
“Reddit is so naturally commercial: Forty percent of the conversations people are having organically on Reddit are more or less about what to buy,” Huffman said. “They don’t say what should I buy. They say what should I wear, what should I watch tonight, where should I go, what’s the best headphone. And so because the organic content is naturally commercial, putting ads alongside it is also a natural thing to do.”
In 2005, Huffman co-founded Reddit along with his college friend Alexis Ohanian.
Sales have risen over 10% across the last 13 quarters, and Earnings per share surged by 178% to $1.25.
By CEO NA Editorial Staff
