Reddit Stock Rallies 7% as Baird Says Renewal Risk Already Priced In

Reddit's stock surged 7% to $155.07 on Wednesday after Baird analyst Colin Sebastian reframed the risk of renewal for the company's AI data licensing agreements.

The agreements with Alphabet's Google and OpenAI expire next year, and have been a major concern for Reddit investors all year.

Sebastian argued that the current share price reflects an outcome near the firm's low-end scenario for the licensing renewals, with base and bull cases implying $10 and $20 per share of upside respectively.

The analyst reiterated a Neutral rating and a $185 price target on Reddit stock, saying the renewal question has been the overhang on Reddit stock all year.