--- title: "Reddit stock: 3 reasons why it's slipping today" type: "News" locale: "en" url: "https://longbridge.com/en/news/287105695.md" description: "Reddit Inc (RDDT) is experiencing significant selling pressure, down over 40% year-to-date, primarily due to institutional de-risking ahead of Nvidia's earnings. The stock is below major moving averages with a bearish RSI, and valuation concerns persist as it trades at a premium P/E multiple of nearly 33x. Macro headwinds, including rising Treasury yields, are further impacting growth stocks. Despite these challenges, Wall Street maintains a 'moderate buy' rating with a price target suggesting a potential upside of nearly 50%." datetime: "2026-05-20T18:37:20.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/287105695.md) - [en](https://longbridge.com/en/news/287105695.md) - [zh-HK](https://longbridge.com/zh-HK/news/287105695.md) --- # Reddit stock: 3 reasons why it's slipping today Reddit Inc (RDDT) is facing intense selling pressure on Wednesday as investor actively recalibrate their exposure to high-multiple technology assets. Following today’s pullback, RDDT sits decisively below its major moving averages (MAs) – with an RSI in the early 40s indicating further downside room before the stock hits “oversold” territory. Versus its year-to-date, Reddit stock is now down more than 40%. ## Pre-Nvidia jitters are hitting Reddit stock The primary catalyst driving the sell-off in RDDT shares on Wednesday is institutional de-risking ahead of Nvidia’s highly anticipated quarterly earnings. Because Reddit has increasingly branded its corporate identity as a high-margin “AI data-licensing play” – leveraging highly publicized, lucrative training content partnerships with tech giants like Google and OpenAI – its stock often moves in tandem with the speculative AI ecosystem. With institutional trading desks proactively reducing risk across AI-adjacent software names to shield portfolios from potential macro volatility, high-growth tech names are bearing the brunt of the pre-earnings anxiety. In short, traders are taking cash profits off the table ahead of Nvidia earnings, which they believe will offer more colour on the broader AI infrastructure capex trend. ## RDDT shares sink on valuation concerns Despite a sharp sell-off in Reddit shares this year, they continue to command a rather premium P/E multiple of nearly 33x, leaving hardly any room for operational error. The social news aggregation platform is currently more expensive to own than peers – including Pinterest Inc. These valuation concerns are evident in options pricing as well. The put-to-call ratio on contracts expiring late June sits at 2.26 currently, indicating a very strong bearish skew. The lower price on those contracts is set at roughly $127, signaling Reddit could crash up to 12% over the next four weeks. And it’s not like RDDT pays a healthy dividend to incentivize ownership despite bearish valuation and derivatives market data. ## Macro headwinds and yield curve pressure Adding to pressure on RDDT stock today is a fairly restrictive macroeconomic environment that’s actually weighing heavily on other long-duration growth assets as well. The global bond market has emerged as a headwind for growth stocks over the last 24 hours, pushing the baseline US 10-year Treasury yield up toward 4.66% as inflation anxieties continue to ripple through the energy markets. Higher risk-free yields inherently compress equity risk premiums, making high-flying tech names less appealing to institutional money managers. This micro-level algorithmic selling is obscuring Reddit’s otherwise exciting fundamental growth engine, including an impressive 44% increase in Q1 average revenue per user (ARPU) and a 75% increase in international revenue. That said, Wall Street remains bullish as ever on RDDT, with a consensus “moderate buy” rating and a mean price target of about $222, which signals potential upside of nearly 50% from current levels. 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