Jim Cramer recommends another beaten-down market giant

Jim Cramer told his followers to buy stock in the defeated company Uber the week starting Monday, Aug. 17. A week later, on Aug. 25, Cramer came back on the “Mad Money” Lightning Round with another beaten-down name.

I think Reddit is such a buy.

No qualifications, no hedging, no “do your own research” preamble. It was an affirmative call on a stock that has lost nearly a third of its value in 2026.

Reddit (RDDT) trades near $155.36 as of writing, down 32.41% year-to-date and 29.20% over the past year, according to Yahoo Finance.

The all-time high was $282.95 in September 2025. The stock bottomed at $119.27 in late March before recovering to current levels.

Meanwhile, the business just posted its eighth consecutive quarter of more than 60% revenue growth according to its Q2 earnings report. That’s not a broken company. That’s a mis-priced one. Or at least that’s what Cramer is betting.

Also Read: A history of Reddit: From “front page of the internet” to billion-dollar valuation

What Reddit’s Q2 results actually showed

Let us go deeper into the Q2 numbers, because the stock’s performance and the business’s performance are telling different stories right now.

Reddit reported Q2 2026 revenue of $805 million, up 61% year-over-year (YoY).
Net income came in at $253 million, more than double the prior year.
Adjusted EBITDA reached $343 million, also up 106% YoY, at a 43% margin.
Free cash flow hit $261 million, an improvement of $150 million from the prior year and more than doubling YOY.
Crossed half a billion weekly active users for the first time, with weekly active uniques up 24% YoY to 514.6 million.
- Source: Reddit Q2 Fiscal 2026 Results

Aren’t they impressive? Of course they are. CEO Steve Huffman’s comments proved it in the company statement.

“Crossing $1 million in revenue per employee and maintaining eight consecutive quarters of over 60% revenue growth shows the strength of our community model.”

For Q3, Reddit guided revenue of $860-$870 million, with adjusted EBITDA of $385-$395 million, according to the same Q2 report.

A Yahoo Finance report shows that the day after those numbers were reported, the stock fell 21%. That reaction tells us everything about what spooked investors.

The metric that sent Reddit’s stock into a tailspin

The culprit was U.S. daily active users. That single metric went backward in Q2. And since U.S. users account for the majority of Reddit’s advertising revenue (42.95% of global traffic), according to Resourcera statistics, investors treated it like a fire alarm.

Daily Active Uniques (“DAUq”) increased 18% year-over-year to 130.3 million. Reddit defines a daily active unique (“DAUq”) as a user whom they can identify with a unique identifier who has visited a page on the Reddit website, www.reddit.com, or opened a Reddit application at least once during a 24-hour period.

Yes, the market is right to watch it, but I think it’s potentially wrong about what it means.

A large share of Reddit’s traffic historically came from Google search referrals. As AI-powered summaries increasingly replace traditional search links, some of that drive-by traffic is evaporating.

The CEO, Huffman, addressed this on the July 30 earnings call.

“We are not building for drive-by traffic. We’re building a daily destination,” he told analysts.

Reddit is prioritizing you, as an engaged, returning user, over passive visitors who land once from a search result and leave.

That’s a strategic choice with a real short-term cost. Whether it’s the right long-term choice is the central debate around Reddit right now. I’d note that weekly active users grew 24% YoY — a figure that suggests the engaged, return-visit user base Huffman is targeting is still expanding meaningfully.

Reddit crossed $1 million in revenue per employee.

Michael Nagle/Bloomberg via Getty Images

Why the broader analyst consensus aligns with Cramer’s view

Cramer isn’t the only one with the buy thought. In August 2026, RDDT has received 26 Buy ratings, 16 Hold ratings, and zero Sell ratings, with an average analyst price target of $216, according to TipRanks data.

At $155, that’s 39% upside to consensus.

Reddit’s competitive position in digital advertising continues to strengthen. Ad revenue grew 64% YoY to $762 million in Q2, with gross margin expanding to 91.3%, according to Reddit’s statement.

More Jim Cramer:

For context, Snap reached 493 million daily active users globally and 971 million monthly active users in Q2, according to the Yahoo Finance earnings call transcript.

Pinterest Q2 results show that its stock recorded an 11% YoY growth in monthly active users to 640 million. Reddit’s revenue growth rate dwarfs both.

Reddit also repurchased 1.5 million shares during Q2 at an average price of $157.57, almost exactly where the stock trades as of writing.

That buyback signals management’s own view of fair value. When a company pays $157 for its own shares, and the market is offering them at $155, I think that’s a data point worth noting.

The insider sale that looks scarier than it is

One more thing is worth addressing because it tends to create unnecessary anxiety. Reddit’s chief accounting officer, Michelle Marie Reynolds, disposed of 1,265 shares on Aug. 20, according to an SEC Form 4 filing.

This wasn’t a discretionary sell. It was an automatic share withholding to cover tax liabilities on vesting restricted stock units. That’s a standard and routine mechanism that happens constantly across public companies. Reynolds retained 13,795 shares after the transaction.

RDDT shares are down 29.20% over the past year and 32.41% year-to-date, according to Yahoo Finance data as of Aug. 26, 2026.

The gap between business momentum and stock performance is wide enough that Cramer felt comfortable using the phrase “such a buy” without qualification.

The U.S. daily user trend reversal in Q3 is the variable that resolves this debate one way or another. Web will find that out come Oct. 29, when Reddit reports next.