A Motley Fool contributor favors Reddit over AppLovin for 2026, citing seven straight quarters of ad growth, new profitability and AI licensing. Reddit's FY2025 revenue rose 69.4%, while AppLovin's net margin was higher at 60.8%, versus Reddit's 24.1%.
AppLovin posted nearly $5.5 billion in FY2025 revenue and about $3.3 billion in net income; Reddit reported about $2.2 billion and $529.7 million, respectively. Reddit's weekly active users topped 500 million for the first time in Q2 2026. Forward P/E was 20.1x for AppLovin and 28.3x for Reddit; price-to-sales was 15.5x and 10.6x. The valuation data came from Financial Modeling Prep and may vary by provider.
AppLovin reported a Q2 revenue miss and guidance below consensus, and faces multiple federal securities class-action lawsuits involving its AI tools and advertising model. Reddit's risks include dependence on user engagement and a small number of major advertisers, volunteer moderators, regulatory scrutiny and search-engine traffic. Stock-based compensation was 49.7% of Reddit's operating cash flow; the article says this inflates reported cash generation because it is added back as a non-cash expense.
