Reddit Inc. (RDDT) and Meta Platforms, Inc. (META) are poised to benefit significantly from a booming digital advertising market, projected to grow from $662.52 billion in 2026 to $2,114.41 billion by 2034, at a CAGR of 15.61%. In the fourth quarter of 2025, Reddit reported a 75% year-over-year increase in advertising revenues to $690 million, with 121 million daily active users, marking a 19% increase. In contrast, Meta’s advertising revenues for the same quarter rose 24.3% year over year to $58.14 billion, comprising 97.1% of its overall revenues.
Reddit’s Average Revenue Per User (ARPU) increased by 42% to $5.98, while Meta reported an 18% growth in ad impressions delivered across its apps. RDDT trades at a forward Price/Sales ratio of 7.5X, compared to META’s 6X. Earnings estimates for Reddit’s 2026 earnings per share are estimated at $4.02, reflecting a 53.44% increase year-over-year, whereas META’s estimate is $29.75, indicating a 26.65% increase.
Both companies currently hold a Zacks Rank of #3 (Hold) but face different market conditions, with Reddit showing faster growth momentum. Amid rising macroeconomic and regulatory challenges, META’s growth potential could be constrained.
