Jim Cramer on Reddit, Inc. (RDDT): 'I Would Be A Buyer'

We recently compiled a list of the 10 Jim Cramer Stocks with Huge Upside Potential. In this article, we are going to take a look at where Reddit, Inc. (NYSE:RDDT) stands against the other Jim Cramer stocks with huge upside potential.

During the episode of Mad Money aired on Wednesday, Jim Cramer broke down what he considers some of the most effective practices for buying stocks.

“I want to pull back the curtain and show you how a professional looks for stocks to buy and knows what to sell. There's no magic. There's no hidden talent. Just a bunch of disciplines, disciplines that can help you try to make mad money if you master them.”

READ ALSO: 21 Stocks on Jim Cramer’s Radar and Jim Cramer’s Thoughts on These 13 Stocks.

Cramer stressed the importance of conducting thorough research before committing to any stock purchase. He emphasized that investors must truly believe in the stock they are buying, even if that belief is rooted in skepticism, so long as they are convinced the price will rise and that the stock deserves that rise. He warned, however, that conviction is not enough on its own when a stock has pulled back from its high. If the decline is unrelated to the company's actual business, which he described as an “extraneous” reason, it may present an opportunity.

“Be certain you're dealing with a momentarily damaged stock and not a troubled company that's going down, down, down. How can you tell the difference between a damaged company and a damaged stock? The fundamentals haven't changed, the stock probably hasn't fallen from grace. It's pulled back for mechanical reasons, profit taking, or some panic in the market in general.”

Cramer pointed out that modern markets are heavily influenced by highly levered hedge funds, which treat stocks like commodities. He said that such behavior leads to irrational sell-offs that can drag high-quality stocks down for reasons unrelated to their financial health. Still, he cautioned that once a stock’s fundamentals begin to shift, if the qualities that originally made it appealing no longer exist, then it is no longer suitable for inclusion in a portfolio.

Our Methodology

For this article, we compiled a list of 43 stocks that Cramer was bullish on during episodes of Mad Money aired between April 24 and May 2. We narrowed the list to 10 stocks that were most favored by analysts. We listed the stocks in ascending order of their average analyst price target upside as of May 8. We also mentioned the hedge fund sentiment around each stock, which was taken from Insider Monkey’s Q4 database of over 1,000 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Reddit, Inc. (NYSE:RDDT)

Average Price Target Upside: 48.52%

Number of Hedge Fund Holders: 87

On April 24, when a caller asked about Reddit, Inc. (NYSE:RDDT), Cramer said:

“Well… Oh man, Reddit. I think Reddit is a very good stock. It came down way too much because there were, it was a short squeeze, and then it evaporated. But I think management, Huff’s (CEO Steve Huffman) doing a great job. I would be a buyer.”

Reddit, Inc. (NYSE:RDDT) operates a popular platform where people post content, join conversations, and participate in topic-focused communities. On May 5, Seaport Research raised its rating on Reddit, Inc. (NYSE:RDDT) stock to Buy from Neutral and set a price target of $165.

The analyst noted that Reddit, Inc. (NYSE:RDDT) posted strong Q1 revenue and EBITDA. Shares dropped after Q2 user growth slowed due to changes in Google search. The firm sees the Google impact as a short-term issue. It still expects steady user growth over time and sees potential for strong gains in revenue and monetization.

Overall RDDT ranks 2nd on our list of Jim Cramer stocks with huge upside potential. While we acknowledge the potential of RDDT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than RDDT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.