Reddit's shares surged 15% on Friday after it reported quarterly results that exceeded Street expectations, boosting investor confidence in the platform's AI-based advertising tools and strong user engagement.

Reddit’s recently launched A.I. marketing tools are already fueling strong advertising growth. In the latest quarter ended June, the social media company reported a 78 percent year-over-year revenue increase to $500 million,

Reddit has reported strong progress in its second-quarter 2025 earnings, with a growing focus on AI. The company is putting a lot of energy into expanding its advertising business, which is still its main source of income. In fact, ads brought in $465 million, making up 93% of Reddit's total revenue.