Reddit Stock RDDT vs AMD Stock AMD: Which Has the Edge in 2025?

NASDAQ:RDDT vs NASDAQ:AMD – Growth Momentum Meets AI Hardware Power

The comparison between NASDAQ:RDDT and NASDAQ:AMD highlights two companies operating in very different industries but converging around the same megatrend: artificial intelligence. Reddit represents a high-growth digital advertising and data licensing platform, while AMD stands as one of the most critical semiconductor players powering AI workloads. Both have delivered eye-catching returns, yet the risk-reward profiles diverge sharply when looking at fundamentals, valuations, and market positioning.

Reddit’s Explosive Valuation and Revenue Surge

Reddit has become one of the standout performers of 2025, with its stock price surging to $259.55, representing a 356% one-year gain and a 58.8% YTD return, compared with the S&P 500’s 10.9% advance. The company’s market capitalization has swelled to $48.6 billion, with revenue projected to reach $2.07 billion in 2025, up 59% year-on-year. Global daily active users expanded 21% to 110.4 million, while advertiser adoption climbed 50%, helping gross margins stabilize at 91%. Analysts are bullish, with Jefferies boosting its price target to $300, suggesting further upside. Yet valuation is stretched: trailing P/E stands at 116.4, forward P/E at 84.0, and price-to-sales at 25.7x, levels more commonly associated with speculative tech at the peak of growth cycles. Heavy insider selling—CEO Steve Huffman alone unloaded over 613,000 shares worth $76.6 million—raises questions about how sustainable current multiples are.

AMD’s AI Hardware Expansion and Rebound from Correction

In contrast, AMD’s 2025 story has been one of recovery and renewed momentum. Trading at $160.13, AMD is up 34% year-to-date after weathering a 20% correction from its $184.42 high in August. The company’s data center revenue jumped to $12.6 billion in 2024, a 94% year-over-year increase, supported by demand for its MI350 AI accelerators, which carry a 70% price premium. AMD’s EPYC processors now command 27% of server CPU unit share and 41% revenue share, eroding Intel’s dominance. Analysts forecast 2026 EPS at $6–$7, implying a forward P/E ratio near 22x, significantly below Reddit’s, with a PEG ratio of 0.63 suggesting undervaluation given projected 35% EPS growth. Unlike Reddit’s advertising model, AMD operates in the capital-intensive semiconductor space, but its hardware is indispensable to AI adoption, giving it more durable competitive positioning.

Investor Positioning and Institutional Behavior

Reddit’s shareholder base shows clear speculative interest. Institutions like BlackRock and Baillie Gifford have been adding aggressively—Baillie Gifford boosted its stake by 764% in Q2—but insiders overwhelmingly sold shares, with more than 319 insider sales against just 3 purchases in six months. AMD, by contrast, enjoys steadier institutional support. Vanguard and BlackRock continue to hold and add to AMD, with insider activity less lopsided, reflecting long-term executive confidence in execution. Volatility remains a differentiator: Reddit recorded 63 price swings above 5% in a year, compared to AMD’s 23, underscoring the former’s speculative nature.

Valuation Gap and Risk Profiles

Reddit trades at levels implying near-perfect execution: EV/EBITDA above 290x and price/book at 18.8x. AMD, despite being more mature, carries more attractive valuation metrics for its growth profile, with forward earnings multiples well below both Nvidia and Reddit. AMD’s risks lie in execution against Nvidia’s entrenched GPU dominance—Nvidia controls 94% of discrete GPUs compared to AMD’s 6%—and in geopolitical factors such as the 15% revenue-sharing deal required to ship AI chips into China. Reddit’s risks are different: an ad-dependent model exposed to economic cycles, the potential for slowing user growth, and the reality that much of its multiple expansion is already priced in.

RDDT vs AMD – Which Stock Offers Better Risk-Reward?

For investors evaluating momentum versus durability, Reddit (NASDAQ:RDDT) is a high-octane growth play priced for perfection, with upside tethered to monetization breakthroughs in ad tech and data licensing. Its 356% one-year rally makes it one of Wall Street’s hottest tickers, but insider selling and extreme multiples suggest a speculative profile. AMD (NASDAQ:AMD), by contrast, is a Buy for long-term exposure to AI infrastructure, trading at a far more reasonable 22x forward earnings with strong EPS growth potential and improving market share in CPUs and accelerators. Reddit may outperform in the short term if momentum continues, but AMD’s valuation and fundamentals provide a sturdier base for investors looking beyond hype cycles.

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