One significant area of investment is growing its advertising business, supported by its AI-powered marketing tools. The results revealed that the majority of Reddit’s revenue continues to come from ads, which brought in $465 million, representing 93% of the company’s total revenue.

Analysts are raising their Reddit price targets and reiterating their buy ratings after the social-media platform’s better-than-expected second-quarter results.

Reddit plans to expand its AI search tool globally, beyond its 12-country user base. Reddit stock climbed 15% Friday after it revealed its second-quarter results, with revenue up 78% year-over-year to about $500 million and EPS hitting $0.45, far surpassing Wall Street expectations.

Reddit's shares surged 15% on Friday after it reported quarterly results that exceeded Street expectations, boosting investor confidence in the platform's AI-based advertising tools and strong user engagement.

Reddit’s recently launched A.I. marketing tools are already fueling strong advertising growth. In the latest quarter ended June, the social media company reported a 78 percent year-over-year revenue increase to $500 million,