Reddit reported first-quarter revenue on Thursday that beat Wall Street expectations, and issued better-than-expected guidance.
The stock initially soared by as much as 19% in after-hours trading, but receded to around 5% when executives discussed the shaky economy and Google search-related challenges.
Here’s how the company did compared with LSEG estimates:
Earnings per share: 13 cents vs. 2 cents expected
Revenue: $392 million vs. $370 million expected
Revenue rose 61% from $243 million a year earlier. Net income was $26.2 million, or 13 cents a share, compared to a year ago when the company recorded a net loss of $575.1 million, or $8.19 a share, due to costs associated with its IPO.
Reddit said second-quarter sales should be in the range of $410 million to $430 million, ahead of Wall Street expectations of $396 million. About the ongoing trade dispute between the U.S. and China, Reddit said in a letter to investors that it is “well-positioned to meet this moment.”
“Ever-shifting macro environments like these create both challenges and opportunities,” Reddit CEO Steve Huffman wrote. “We’ve grown through challenging times before — people need connection and information just as much in uncertain times.”
Reddit operating chief Jen Wong acknowledged the sluggish economy on the company’s earnings call, saying that while “there’s a lot of uncertainty in the market,” it has been “mostly business as usual.”
“We’re staying close to our customers to help them through the volatility by sharing insights on consumer trends that inform their strategy based on things that we’re seeing on Reddit,” Wong said.
The company’s global daily active uniques, or DAUq, jumped 31% year over year to 108.1 million in the first quarter. Analysts were expecting 107.3 million.
Reddit has been a big beneficiary from Google search changes and internal site improvements, which has led to an influx of new and returning users, or logged-out users. The company has focused on site updates and features intended to convince logged-out users to create accounts and become logged-in users, which are more valuable to advertisers.
The company’s first-quarter global logged-in DAUq rose 23% year over year to 48.7 million, while its global logged-out DAUq jumped 38% to 59.4 million.
In February, Reddit said that a Google search algorithm change temporarily impacted the company’s user growth during the fourth quarter. Search-driven traffic soon recovered in the first quarter, the company said at the time.
Huffman said on the earnings call that Reddit’s search-derived traffic “could be more bumpy than usual” in the near term, because “the search ecosystem is under heavy construction.”
He said that search-related “short-term bumps don’t affect our long-term strategy or opportunity,” and that the company is “in control of our own destiny.”
Huffman later added that the online search market is being impacted by large language models, or LLMs, that companies like OpenAI and Perplexity are using to gather and then summarize web data based on written prompts. Reddit’s own AI-powered ChatGPT-like service, dubbed Reddit Answers, now has 1 million weekly active uniques, or WAUq, the company said.
Although people may want to use LLM-powered tools to see “annotated sterile answers from AI,” Huffman said that Reddit’s unique user-created content involving “subjective, authentic, messy, multiple viewpoints” will help the company stand out.
Across the online ad sphere, companies are highlighting the potential impact of economic shifts.
Meta shares rose Thursday after the company reported first-quarter earnings that beat on the top and bottom. However, the company’s advertising sales in the Asia-Pacific region missed estimates.
Susan Li, Meta’s finance chief, said that “Asia-based e-commerce exporters” have reduced their digital ad spending likely due to the de minimis trade loophole ending Friday.
Snap said in its earnings report this week that the company “experienced headwinds to start the current quarter,” and declined to provide guidance because of macroeconomic uncertainties.
Alphabet reported first-quarter earnings last week, and said that Google Advertising sales jumped 8.5% year over year to $66.89 billion while YouTube ad sales rose 10% to $8.93 billion.
A slogan related to Artificial Intelligence (AI) is displayed on a screen in Intel pavilion, during the 54th annual meeting of the World Economic Forum in Davos, Switzerland, January 16, 2024.
Denis Balibouse | Reuters
Big Tech is doubling down on investing billions in India, drawn by its abundance of resources for building data centers, a large talent and digital user pool, and market opportunity.
In under 24 hours, Microsoft and Amazon pledged more than $50 billion toward India’s cloud and AI infrastructure, while Intel on Monday announced plans to make chips in the country to capitalize on its growing PC demand and speedy AI adoption.
While India trails the U.S. and China in the race to develop a native AI foundational model, and lacks a large domestic AI infrastructure company, it wants to leverage its expertise in the information technology sector to create and deploy AI applications at enterprise level, also offering Big Tech companies a huge opportunity.
Having a model or computing is not enough for any enterprise to use AI effectively, and it requires companies making application layer and a large talent pool to deploy them, S. Krishnan, secretary at India’s Ministry of Electronics and Information Technology, told CNBC.
Stanford University ranks India among the top four countries along with the U.S., China and the UK in the global and national AI vibrancy ranking. GitHub, a community of developers, has ranked India at the top with the global share of 24% of all projects.
India’s opportunity lies more in “developing applications” which will be used to drive revenues for AI companies, Krishnan said.
On Tuesday, Microsoft announced $17.5 billion in investment in the country, spread over 4 years, aimed at expanding hyperscale infrastructure, embedding AI into national platforms, and advancing workforce readiness.
“This scale of capex gives Microsoft first‑mover advantage in GPU‑rich data centers while making Azure the preferred platform for India’s AI workloads, as well as deepening alignment with the government’s AI public infrastructure push,” said Tarun Pathak, research Director at Counterpoint Research.
Amazon on Wednesday announced plans to invest over $35 billion, on top of the $40 billion it has already invested in the country.
Over the past few months, AI and tech majors such as OpenAI, Google, and Perplexity have offered their tools for free to millions in India, with Google also firming up its plans to invest $15 billion toward building data center capacity for a new AI hub in southern India.
“India combines a huge digital user base, rapidly growing cloud and AI demand, and a high-talent IT ecosystem that can build and consume AI at scale, making it more than just a market for users and instead a core engineering and deployment hub,” Pathak said.
Data center opportunity
India has several advantages when it comes to building data centers. Markets such as Japan, Australia, China and Singapore in the Asia Pacific region have matured. Singapore, one of the oldest data center hubs in the region, has limited room to deploy large-scale data centers due to land availability issues.
India has abundant space for large-scale data center developments. When compared with data center hubs in Europe, power costs in India are relatively low. Coupled with India’s growing renewable energy capacity — critical for power-hungry data centers — and the economics begin to look compelling.
Local demand, fueled by the rise of e-commerce — a major driver of data center growth in recent years — and potential new rules for storing social media data, strengthens the case.
Put simply: India is entering a sweet spot where global cloud providers, AI players, and domestic digitalization all converge to create one of the world’s hottest data center markets.
“India is a pivotal market and one of the fastest‑growing regions for AI spending in Asia Pacific,” said Deepika Giri, associate vice president and head of research, big data & AI, at International Data Corporation.
“A major gap, and therefore a significant opportunity, lies in the shortage of suitable compute infrastructure for running AI models,” she added. Big Tech is looking to capitalize on the infrastructure opportunity in India by investing heavily in the cloud and data center space.
Global companies are expanding capacities closer to service bases in IT cities such as Bangalore, Hyderabad and Pune from traditional centers like Mumbai and Chennai which are closer to landing cables, as they build data centers in India for the world, Krishnan said.
— CNBC’s Dylan Butts, Amitoj Singh contributed to this report.
Illustration of the SK Hynix company logo seen displayed on a smartphone screen.
Sopa Images | Lightrocket | Getty Images
South Korea’s SK Hynix on Wednesday confirmed that it is weighing a U.S. listing as the memory chipmaker’s valuation soars on global demand for artificial intelligence hardware.
The company at the center of the AI infrastructure boom said in a regulatory filing that it was “reviewing various measures to enhance corporate value, including a U.S. stock market listing utilizing treasury shares,” while noting that no final decision has been made.
A U.S. listing would give American investors direct access to SK Hynix shares, which have surged nearly 230% so far this year in trading in Seoul on the back of strong AI demand.
The Korea Exchange on Tuesday asked SK Hynix to address a Korea Economic Daily report that the company had received proposals to list about 2.4% of its shares as American depositary receipts (ADRs) backed by treasury stock.
ADRs are tradable certificates issued by U.S. banks that represent shares in a foreign company. While they tend to trade with lower liquidity than a full U.S. listing, which can deter some investors, ADRs use existing shares rather than new stock, preserving value for existing shareholders.
SK Hynix holds treasury shares equivalent to about 2.4% of its issued stock, according to the company’s investor relations website.
Shares of SK Hynix rose 4% on Wednesday following its statement, before paring gains on Thursday, trading over 2% lower.
The company has cemented its lead in high-bandwidth memory chips, which are used in Nvidia’s AI processors.
A U.S. listing could help narrow valuation gaps between the company and U.S.-listed memory rival Micron Technology, as well as Samsung Electronics.
SK Hynix has also been committing significant capital at home and abroad to expand its supply capacity, as it races to keep up with growing AI demand.
The firm has committed nearly $4 billion to an advanced packaging fab in Indiana, aligning with Washington’s aim to expand domestic chip production.
SK Hynix is also set to benefit from the government’s growing support of the local semiconductor industry.
South Korea is considering building a 4.5 trillion won ($3.06 billion) foundry, funded by state and private capital to nurture local chipmakers amid growing demand for AI chips, according to a Reuters report on Wednesday.
The report added that South Korean President Lee Jae Myung met with executives from chipmakers, including Samsung Electronics and SK Hynix, on the same day to discuss plans to maintain the country’s lead in memory chips and support its local chip manufacturing.
Federal Reserve Chair Jerome Powell reacts while speaking during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on Dec. 10, 2025 in Washington, DC.
Chip Somodevilla | Getty Images
It ended up being a “hawkish cut,” as expected. Still, investors managed to find a few gifts tucked betweenthe lumps of coal.
Even though the U.S. Federal Reserve lowered interest rates on Wednesday stateside, two regional bank presidents — Jeffrey Schmid of Kansas City and Austan Goolsbee of Chicago — wanted rates to stand pat.
Their cautioned was echoed in the Fed’s “dot plot” of rate projection, which showed officials penciling in just one cut in 2026 and another for 2027.
Even the Fed’s rate statement was repurposed from the December 2024 meeting, which ushered in a nine-month period without cuts until September this year.
Why, then, did U.S. markets rise after the meeting?
The biggest surprise was the Fed’s announcement that it would begin purchasing $40 billion in Treasury bills, starting Friday. That move increases the money supply in the economy. In other words, it’s a stealthy way to ease conditions, which helps support financial markets.
Next, Chair Jerome Powell dismissed speculation about future hikes.
“I don’t think that a rate hike … is anybody’s base case at this point,” Powell said. “I’m not hearing that.”
Fed officials also see the U.S economy as remaining resilient. Collectively, they increased their forecast for economic expansion in 2026 to 2.3% from an earlier estimate of 1.8% in September.
“We have an extraordinary economy,” said Powell.
And the markets may be setting up for an extraordinary finish to the year.
“The last interest rate decision of 2025 has essentially paved the way for a Santa Claus rally to end the year, and the S&P 500 is poised to exceed the 7,000 milestone in the next few weeks,” said José Torres, senior economist at Interactive Brokers.
For investors, that would count as a very decent Christmas surprise.
— CNBC’s Jeff Cox contributed to this report.
What you need to know today
And finally…
U.S. President Donald Trump delivers remarks on the U.S. economy and affordability at the Mount Airy Casino Resort in Mount Pocono, Pennsylvania, U.S. Dec. 9, 2025.
U.S. President Donald Trump has once again provoked outrage among his European allies, describing them as “weak” in an interview with Politico published Tuesday. Criticizing the region’s response to the war in Ukraine, Trump said: “I think they don’t know what to do.”
That comment will be jarring for Europe after its efforts to support Ukraine — efforts which Trump has frequently downplayed. Instead, Europe has had to watch on as U.S. officials have held talks with their Russian and Ukrainian counterparts on a draft peace plan for Ukraine, without a seat at the table.
