Jim Cramer Says Reddit (RDDT) Is "Absolutely Worth Buying at These Levels"

We recently published a list of 8 Stocks on Jim Cramer’s Radar Recently. In this article, we are going to take a look at where Reddit, Inc. (NYSE:RDDT) stands against other stocks that Jim Cramer discussed recently.

On Wednesday’s episode of Mad Money, Jim Cramer reviewed the recent developments affecting drug distribution companies and laid out why he is turning cautious on the group. He pointed out that stocks of major drug distributors have retreated from their all-time highs.

“Most of the time, that’s because of vague, amorphous concerns that some type of regulatory crackdown will force them out of business or, at the very least, make them a lot less profitable.”

READ ALSO Jim Cramer Put These 8 Stocks Under a Microscope Recently and Jim Cramer Commented on These 6 Natural Gas Players

Cramer referenced the executive order signed by the President last week aimed at lowering drug prices, which triggered a sell-off across the drug distribution sector. He explained that the order would effectively require pharmaceutical companies to offer the U.S. government drug prices that match the lowest rates charged in other advanced economies. Cramer said the market’s fear is straightforward: if drugmakers are forced to cut prices for their government customers, then drug distributors could see their margins shrink.

“The bottom line: No matter how well the drug distributors have been doing, I do not want to stick my neck out for an industry that now seems to be hated by both the Democrats and the Republicans. It seems like the only thing they agree on, doesn’t it? There are so many potential winners in this market, I say, why take the risk?”

Our Methodology

For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on May 14. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s 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)

Number of Hedge Fund Holders: 87

Cramer noted that Reddit, Inc. (NYSE:RDDT) is a “buy” but only for investors who can withstand market volatility.

“So many stocks have made incredible comebacks over the past few weeks, but there are still plenty of names that are way down from their highs earlier this year. Take Reddit… while the stock soared 11% today, it’s off more than a hundred bucks from its February peak of $230 and change. I think it might be a buying opportunity here as long as you steel yourself for a potentially wild ride. It is a wild trader. See, two weeks ago, Reddit reported the stunning quarter, but the stock didn’t get any credit for it at all… Despite initially surging 18% in after-hours trading, Reddit stock finished the next session down more than 4%…

While I think Reddit’s absolutely worth buying at these levels, even after today’s monster move, stocks like these are only worth owning if you can stomach some serious volatility like we’re having right now. Keep in mind, we’re always one presidential tweet or whatever you want to call it away from these kinds of names falling out of favor all over again. That’s why I say Reddit’s a buy, but only if you’ve got the intestinal fortitude to stick around for the long haul.”

Reddit (NYSE:RDDT) runs a widely used platform where users share content, take part in discussions, and engage in communities centered on specific topics.

Overall, RDDT ranks 2nd on our list of stocks that Jim Cramer discussed recently. 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 timeframe. 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.