Reddit Shares Jump 16% as Company Joins the S&P 500

Reddit shares jumped as much as 16% on Friday after S&P Dow Jones Indices announced the company will join the S&P 500 on August 18, replacing AvalonBay Communities. The move makes Reddit only the second social media company in the benchmark index alongside Meta Platforms.

The inclusion follows a strong second quarter: revenue hit roughly $805 million, up 61% year-over-year, with advertising revenue climbing 64% to $762 million and gross margin holding above 91%. Net income more than doubled from a year earlier, and Reddit guided third-quarter revenue to $860-870 million, above analyst expectations.

Joining the S&P 500 typically forces index-tracking funds — including Vanguard's and BlackRock's S&P 500 ETFs — to buy the stock, widening its investor base. Reddit went public in March 2024 and has since built out advertising partnerships with Google and OpenAI.