Reddit's Momentum Surge Defies Valuation Concerns As Wells Fargo Bumps Target Price

Reddit Inc. (NYSE:RDDT) shares have entered an elite quantitative tier this week, with the company’s momentum metrics surging into the 90th percentile following a bullish price target adjustment from Wells Fargo.

Breaking Down the Momentum Shift

According to Benzinga Edge data, Reddit's momentum score climbed significantly week-over-week, moving from 89.79 to 90.98. This places the stock in the top decile of market performers, indicating exceptional relative strength.

The momentum ranking measures a stock’s strength based on price movement patterns and volatility over multiple timeframes, ranking it as a percentile against other stocks.

This quantitative strength is supported by a flawless technical backdrop. The data indicates that Reddit is currently maintaining positive price trends across the board—short, medium, and long terms.

This signals that the stock is in an upward trend not just over the past year, but also over the last couple of quarters and months, as per Benzinga’s Edge Stock Rankings.

Analyst Catalyst Drives Optimism

The surge in sentiment and technical strength aligns with fundamental optimism from Wells Fargo.

Analyst Ken Gawrelski raised the firm's price target on Reddit to $207, up from $186, while maintaining an Equal Weight rating, as per TipRanks report.

The bank pointed to steady execution and favorable market conditions that could enable a solid fourth-quarter print. Additionally, Wells Fargo views 2026 as a “key year” for the social platform, driven by AI search capabilities gaining traction and data licensing deals set for renewal.

Valuation Vs. Performance

While the momentum is strong, the data highlights a divergence between price action and traditional valuation. Reddit's Value score sits at just 4.91, a percentile-ranked metric comparing market price to fundamental measures like assets and earnings.

This low score suggests the stock is trading at a premium relative to its fundamentals, as investors prioritize the company’s growth story and recent price strength over deep-value metrics.

RDDT Outshines In 2026 So Far

Shares of RDDT have surged by 8.93% in 2026 so far. They were also higher by 74.30% over the last six months and 47.86% over the past year.

On Wednesday, the stock closed 2.53% lower at $252.38 apiece, while it was down 0.94% in premarket on Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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