Reddit vs. Snap: Which Social Media Ad Stock is the Smarter Buy Now?

Reddit RDDT and Snap SNAP are user-driven social platforms competing for digital ad budgets. While Snap focuses on visual messaging, AR experiences and creator content, Reddit emphasizes interest-based public forums with strong community engagement. Both platforms are investing in AI to improve ad targeting, content discovery and overall campaign performance.

Per a report by The Business Research Company, the global social media ad market is projected to grow from $228.18 billion in 2024 to $406.64 billion by 2029, at a CAGR of 12.25%. Reddit is scaling tools like Reddit Answers and contextual targeting, while Snap is advancing Smart Campaign Solutions and Sponsored Snaps. As brands seek platforms with personalized reach and engaged audiences, both stocks are working to capture share in the expanding digital ad landscape.

However, SNAP or RDDT, who has an edge right now? Let's delve deep to find out.

The Case for RDDT

Reddit is scaling as a community-driven social platform built around public discussion. With over 100,000 active subreddits, the platform supports highly engaged forums across diverse interest areas. Reddit Answers reached 6 million weekly active users in the second quarter of 2025, up 5x sequentially. AI models now power ranking, onboarding, moderation and translation, boosting engagement and accessibility.

Reddit’s ad tools are expanding appeal among performance marketers. Features like Reddit Pixel, Conversion API and Dynamic Product Ads enhance attribution. Smartly.io and Meta’s integrations simplify campaign setup, while Conversation Placement formats see up to 10% higher click-throughs than standard ads.

Ongoing developments are helping drive momentum in digital advertising. Ad revenues grew 84% year over year to $465 million in the recently reported second quarter, supported by rising demand from both large brands and performance advertisers. The Zacks consensus Estimate for third-quarter 2025 ad revenues is pegged at $438.33 million. The ad mix now leans toward video, carousel and product formats, comprising over 60% of revenue.

User engagement continues to trend higher as the platform evolves. Daily Active Uniques (DAUq) rose 21% year over year in the second quarter to 110.4 million, aided by international expansion and AI-led discovery. The consensus mark for third-quarter 2025 DAUq is pegged at 113.17 million. While ad capabilities are still maturing, Reddit’s strong communities and growing advertiser traction are positioning it as a credible challenger in the evolving digital ad landscape.

The Case for SNAP

Snap continues to evolve as a visual-first social media platform with strong traction among Gen Z users. Its global user base continues to expand, reaching 469 million Daily Active Users (DAU) during the second quarter of 2025, up 8.6% year over year.

Premium experiences remain a key catalyst to Snap’s engagement strategy. The Snapchat+ subscriber base approached 16 million during the recently reported quarter, supported by new offerings like Lens+, which gives access to AI-powered video effects and exclusive features. Snap’s AR tools, including Camera Kit and Spectacles, continue to differentiate it from its peers by enabling immersive experiences across both consumer and enterprise use cases.

Snap’s advertising platform is evolving with commerce-driven ad volume growing 39% year over year in the second quarter, and newer ad formats such as Sponsored Snaps are delivering stronger conversion outcomes. With campaign tools improving measurability and efficiency, Snap is seeing broader advertiser adoption. The Zacks consensus estimate for third-quarter 2025 revenue is pegged at $1.26 billion, indicating sustained advertiser interest. While the consensus mark for third quarter 2025 DAUs is pegged at 476.62 million.

While competition remains intense, Snap’s blend of product depth, creator engagement and ad performance progress reinforces its relevance in the social media ad landscape.

Price Performance and Valuation of RDDT and SNAP

In the year-to-date period, RDDT shares have rallied 30.2%, while SNAP shares have declined 27.7%.

RDDT and SNAP Price Performance

In terms of valuation, Reddit appears more expensive, trading at 17.35X forward 12-month Price/Sales compared with Snap’s 2.09X.

Both Reddit and Snap hold a Value Score of F.

RDDT and SNAP Valuation

How Do Earnings Estimates Compare for RDDT and SNAP?

The Zacks Consensus Estimate for Reddit’s third-quarter 2025 earnings is pegged at 34 cents per share, up by 2 cents over the past 30 days. The figure marks an improvement of 112.5% over the year-ago quarter’s reported figure.

Reddit Inc. Price and Consensus

Reddit Inc. price-consensus-chart | Reddit Inc. Quote

The Consensus mark for SNAP’s third-quarter 2025 earnings is pegged at 4 cents per share, unchanged over the past 30 days. The figure marks a decline of 50% over the year-ago quarter’s reported figure.

Snap Inc. Price and Consensus

Snap Inc. price-consensus-chart | Snap Inc. Quote

Here’s Why SNAP is a Better Buy Right Now

Both Reddit and Snap are gaining traction in the digital ad space. Reddit is building momentum through community-led engagement and improving ad tools, though its monetization model is still evolving. Snap, on the other hand, offers a mature platform with a broader global footprint, deeper youth traction and expanding premium features like Snapchat+ that enhance monetization.

Snap’s more established user ecosystem and scalable ad formats give it a clearer path to near-term growth. Meanwhile, Reddit’s stretched valuations and earlier-stage monetization framework suggest a more measured outlook.

Currently, Snap carries a Zacks Rank #2 (Buy), making it a more attractive pick than Reddit, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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