reddit CEO Steve Huffman said the company may be one of the most underrated winners of the artificial intelligence boom.
“There is no artificial intelligence without actual intelligence,” he said on “Mad Money.” “Knowledge has to come from somewhere, and Reddit is one of the main sources of that kind of information that not only AIs but people crave.”
The comments came after Reddit delivered an outstanding quarter Thursday night, sending the stock up about 9% in extended trading. Revenue increased 69% year-over-year to $663 million, mostly from advertising, and daily active users increased 17% to $126.8 million. Its gross profit margin exceeds 90%, a level that stands out among top-class high-tech companies.
“We are a lightweight company,” he said. “We’re not building data centers…We’re building consumer products for people.”
This model allows Reddit to benefit from the AI boom without the huge capital expenditures required by its competitors. The company’s capital expenditures for the quarter were about $1 million, a fraction of what hyperscalers are investing in compute and data centers. This helped Reddit generate $311 million in free cash flow in the March quarter, more than double the amount from the year-ago period.
At the same time, Reddit’s vast archive of user-generated conversations is becoming increasingly valuable to the biggest players in AI. Huffman cited partnerships with Google and OpenAI as evidence of that demand.
“People want what Reddit has,” he said, emphasizing how AI systems rely heavily on authentic, real-world data. “What we’ve seen with the rise of AI over the past few years is that the entire market is starting to learn that Reddit is a powerhouse of AI.”
