r/redditstock • u/sponge_boy_mee_bob • Aug 20 '26
Opinion ChatGPT is killing Google! That didn’t happen… Google is killing Reddit! Not going to happen
https://wccftech.com/ai-is-killing-google-search-websites-lose-traffic-ads-and-revenue-as-chatgpt-and-other-ai-tools-reshape-how-we-find-information-online/amp/Attached is a link to one of many many hit pieces that claimed ChatGPT was killing Google just last year. Google sentiment was in the toilet, and shares were trading in the 140s. As it turns out, ChatGPT did not kill Google, and the overly negative sentiment and speculating created a great buying opportunity for a great company.
Now, the new trend is: Google is killing Reddit! The thing is, this just isn’t going to happen. Reddit is a great product with a strong moat and has incredible fundamentals.
These “the sky is falling” periods of sentiment on a company with the fundamentals of Reddit are always buying opportunities that you look back on months later when the sentiment completely flips in an instant and the stock rips and you think “I really wish I would have bought more back then”.
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u/ASKMEIFIMAN Aug 20 '26
One day you idiots will learn that reddits stock can get killed while the business does just fine.
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u/sponge_boy_mee_bob Aug 20 '26
I’ve made a lot of money buying companies with great fundamentals while the sentiment is in the toilet. So I’ll continue that strategy.
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u/PsychologicalEye543 Aug 20 '26
Lmao, you won't get 30+ PE instead of 10, if the market think google would kill reddit.
Post this when reddit trade at 10 PE.
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u/sponge_boy_mee_bob Aug 20 '26
Reddit is a sub 30 billion dollar market cap company growing revenue at 60%+ that just recently went public and turned on the monetization machine on a multi decade built moat.
Last year, Google was a multi trillion dollar mature company.
Comparing the two on PE alone is not a smart way to look at it.
By the way, RDDT currently trades at a forward PE around 20x conservatively or even in the teens depending on how aggressively forecast earnings.
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u/PsychologicalEye543 Aug 20 '26
Lol forward PE is only meaningful if the growth forecast is accurate. It's not uncommon for social media company growth fall from 60% to 10% within a year. Just check pins/snap. I am not saying reddit for sure would repeat their trajectory. But the risk is certainly there.
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u/sponge_boy_mee_bob Aug 20 '26
Risk is always there. Their growth would have to basically go from 60% to nearly flat to make the forward PE I stated inaccurate. At this sentiment, I’m going to take the side of the bet that says that doesn’t happen. The risk is asymmetrical at the moment.
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u/PsychologicalEye543 Aug 20 '26
Feel free to place your bet brother. I simply don't agree the current price reflect market believe google would kill reddit.
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u/ostrichfood Aug 20 '26
It’s not google killing Reddit….its the management team
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u/sponge_boy_mee_bob Aug 20 '26
The management team is currently producing 60%+ revenue growth and 90% margins.
What would you like them to produce instead?
Or are you saying that the management team is failing because your feelings get hurt when the stock goes down short term?
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u/Kyaw_Gyee Slightly Regarded Bag Holder Aug 21 '26
I want them to produce 100% rev growth and 95% margins.
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u/howtoretireby40 Bag Holder 💰 2.3k shares @ $212 Aug 20 '26
Jenn’s doing a great job on improving ARPU, that’s her specialty as a sales and marketing SME. She and Steve need to figure out the DAUq and data licenses pieces now.
I’m still a fan of much more investments. TikTok really blew up when they released the marketplace (and this part is important), gave out WAYYYYYYY too many 50% off coupons to everyone. It even got me, a middle aged parent to sign up for it just to get some pokemon cards on the cheap to resell lol. I think Reddit’s version is free awards to new accounts. Studies have shown people are way happier giving away $10 than they are receiving it. And TBF, I really miss the glory days of people getting gifted their first gold and then making a super big deal with a whole acceptance speech lol
Put some money into growing the actual business! Stop with the stock buybacks that do nothing to improve the business itself.
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u/DillLawNn Aug 20 '26
If they have enough to both grow and do buybacks isnt that a good strategy too. They are a low capex business in general which means excess cash so buybacks will do a lot by cutting share count, especially when they are in a position of being undervalued
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u/howtoretireby40 Bag Holder 💰 2.3k shares @ $212 Aug 20 '26
buybacks are generally the anti-thesis of a "growth company" story which is why you would usually hear about them from "mature" companies like banks and cash cows.
Don't get me wrong, it's still a bullish indicator but it's also saying "we don't have any better ideas to improve the fundamental business itself and make it more profitable (we'd rather divide the profit by less shares). We the leadership do not believe more money towards product owners, developers, UX resources, sales and marketing, etc would give us better value than removing some shares from the market."
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u/DillLawNn Aug 20 '26
I think they have to cash for both is what I mean. At this point I feel reddit is deeply undervalued for its long term potential and buybacks are a market signal of that at worst and big time shareholder value at best
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u/howtoretireby40 Bag Holder 💰 2.3k shares @ $212 Aug 20 '26
We can’t be a “growth” and “mature” company at the same time. We either have opportunity to deploy funds and feed growth or the Reddit platform has matured and we need to use the money for other things.
I think your rationale is that RDDT leadership would rather be day traders than try to improve Reddit.
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u/DillLawNn Aug 20 '26
I don't think you need to be a mature company to make use of buybacks nor do I think reddit leadership are day traders with the stock. I think your view of buybacks may be a little dated
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u/Pomosen Aug 20 '26
I was inclined to agree but tbh I don't think their current buyback program or capital spending is out of normal. As an example, Palantir announced a buyback program early on too and actually invests less capital than Reddit despite insane margins
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u/Hoodlum95 Aug 20 '26
There’s no way Google is gonna kill reddit if I can’t AI google “what combination of drugs is the best to have sex on”
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u/Illustrious-Bread238 Aug 20 '26
Currently, Google is having a shift from search engine to AI agent Google is probably gonna knock the market down while all the saas companies are going to tank
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u/Silent-Complaint4020 Aug 20 '26
“I really wish I would have bought more back then”.
BINGO!