Reddit Shares Surge as CEO Seeks Usage-Based AI Licensing Deals
If successful, Steve Huffman’s push to convert 2027 renewals with Google and OpenAI to usage-based pricing could meaningfully raise Reddit’s AI licensing revenue.
Overview
- Reddit stock rose roughly 14% to about $197.32 in afternoon trading on Wednesday as investors priced in stronger AI-licensing prospects.
- CEO Steve Huffman is actively seeking to replace flat-fee contracts with usage-based, dynamic pricing for 2027 renewals with Google and OpenAI.
- The company reported a strong Q1 on April 30 with EPS of $1.01 versus a $0.62 consensus and revenue of $663.41 million, which supports the bullish case.
- Existing deals with Google and OpenAI currently generate about $50–60 million a year each and together are cited near $203 million, so pricing changes could materially boost revenue.
- Institutional investors have been adding positions even as insiders sold shares under pre-arranged 10b5-1 plans, and analysts carry a ‘Moderate Buy’ consensus with an average target near $230.75.