Reddit Inc RDDT has turned the tables on Snap Inc SNAP in social media rankings, climbing 12% on Election Day to reach a market cap of $21.5 billion, ahead of Snap’s $20.4 billion.

This milestone is a striking achievement for Reddit, which, despite having one-fourth of Snap’s user base and revenue, has investors far more bullish on its prospects.

Snap’s Diminishing Spark: Stuck In A Growth Rut

For Snap, this recent development highlights an ongoing struggle to secure its footing in the competitive social media space. Snap’s trading price of just over $12 per share reflects investor skepticism, especially considering its initial public offering price was $17 in 2017.

Snap’s user growth in the U.S. has stagnated, with no increase in domestic users for two years—a major concern given that North America accounts for 60% of its revenue.

Revenue grew from $4.1 billion in 2021 to an estimated $5.3 billion in 2024—a modest 29% increase over three years. For a social media platform looking to thrive in a competitive landscape, Snap’s current trajectory risks positioning the company as a “permanently subscale” player, with growth potentially falling short of reigniting investor optimism, according to The Information’s Martin Peers.

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Reddit’s Meteoric Rise: User Surge, Ad Revenue Momentum

In contrast, Reddit has been on a remarkable growth path, with daily active users jumping 47% in the past year, fueled by a surge of interest around high-profile events, including the election. This rising user base has led to a boom in ad revenue, propelling Reddit’s recent valuation and fueling confidence among investors.

As a discussion forum covering countless topics, Reddit’s broad appeal means its potential audience could significantly outgrow Snap’s narrower, visually driven platform. As the election results roll in, it’s almost certain that Reddit will see more engagement than Snap—a testament to Reddit’s expanding reach and impact.

Chart Signals Favor Reddit Stock

Reddit’s stock is also painting a bullish technical picture.

Chart created using Benzinga Pro

At $122.57, Reddit’s stock is trading above its five, 20 and 50-day exponential moving averages, signaling a strong upward trend. The stock’s eight-day, 20-day and 50-day simple moving averages (SMA) are well below the current price, further reinforcing the bullish signal.

Reddit’s Moving Average Convergence Divergence (MACD) indicator, at 12.26, and its Relative Strength Index (RSI), at 78.95, suggest overbought conditions. The steady buying pressure has pushed the stock up, indicating strong price momentum and reflecting investor confidence in the platform’s growth potential. However, these indicators may also signal a possible cooling period if momentum slows.

Snap’s Technical Picture Shows Limited Upside

Snap stock is also experiencing buying pressure, with its price above its five, 20 and 50-day exponential moving averages.

Chart created using Benzinga Pro

However, its position relative to the 200-day SMA at $12.53 suggests a bearish signal for the long term. Snap’s MACD at 0.48 and RSI at 64.44 show moderate bullish momentum, though not nearly as strong as Reddit’s.

All Eyes On Reddit’s Next Move

As Reddit’s momentum continues, it’s evident that investors see growth potential that Snap’s platform may not be able to match.

While Snap faces the challenge of expanding its user base and revenue stream in a saturated market, Reddit is riding a wave of user engagement that seems to have investors excited about the future.

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