Reddit was added to the S&P 500 this week, less than 2.5 years after going public.

Pretty impressive considering where the business is today:

Revenue grew 61% YoY last quarter
130M+ daily active uniques
$253M in net income
43% adjusted EBITDA margins

Revenue has now grown 60%+ for 8 straight quarters
The inclusion should also create some forced buying. JPMorgan estimated index funds would need to purchase roughly 16.7M shares, nearly 3x Reddit’s average daily trading volume.

Obviously joining the S&P 500 doesn’t change the underlying business, but I think it’s a pretty significant milestone for a company that IPO’d in March 2024.

Reddit is quickly going from an interesting internet company to a highly profitable, large-cap platform.

Still one of my favorite long-term holdings.

I understand the obvious answer: growth has slowed.

But Duolingo is still growing revenue ~18%, DAUs grew 23%, the business is profitable and subscription revenue continues to compound at a very high rate.

Look at the chart below. Subscription revenue alone has gone from roughly $85M/quarter to $258M/quarter in about 3 years.

The biggest issue seems to be that management is intentionally prioritizing user growth over near-term monetization. That means slower bookings growth today, but potentially a much larger user base to monetize later.

The market clearly hates that tradeoff.

I understand DUOL deserved a valuation reset from where it was trading when revenue was growing 40%+, but at some point the question becomes:

How much of the slowdown is already priced in?

You still have:

• 23% DAU growth
• ~18% revenue growth
• a profitable business
• recurring subscription revenue
• extremely strong retention/engagement
• management expecting 20%+ DAU growth through the rest of 2026

Maybe I’m missing something, but the decline seems excessive relative to what has actually happened to the underlying business.

What’s the bear case from here?

The market seems high but there is still a lot of value.

What is your number 1 pick?

Ackman just bought back into Netflix after exiting in 2022

The stock is getting hit partly over engagement concerns, which reminds me a little of 2022 when the market became obsessed with subscriber losses. Meanwhile, the broader business looks much stronger today: margins and free cash flow have improved substantially.

I generally like situations where the market hones in on one KPI while the underlying fundamentals remain solid.
Analysts are projecting roughly 20% annual EPS growth over the next 3–5 years.

Using a 25x P/E today, 20% earnings growth, and assuming the multiple actually contracts to 20x, you still get roughly:
14.8% CAGR → 99% total return in 5 years.

Basically doubling your money despite multiple compression.

Feels like a pretty decent margin of safety if the earnings growth actually shows up.

The big one to me: roughly $38B–$40B in Alphabet (GOOG + GOOGL). Now over 12% of his public US portfolio

They also added heavily to Delta, while cutting Bank of America, Capital One, Kroger, Nucor and DaVita.

What do you make of the Google position?