TMTB Morning Wrap

Good morning. QQQs +40bps — risk on continues as middle east tensions ease and expectations for fed cuts have risen over last few weeks. BTC +1% while yields mixed - short end of the curve lower while 10 year slightly higher.

MU Earnings tonight where expects have risen - hearing Aug Q EPS guide bogey is in the $2.20-$2.30 range now.

Fairly slow morning, but let’s get to it…

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RDDT: Hearing Cleveland out with a positive initiation citing rev upside over the next 1-2 years driven by product traction and improving ROI, while saying GOOGL AIO Overviews not hurting RDDT ad spend (some advertisers actually called out RDDT’s favorable placement)

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RDDT: RBC Sees Conservative Ad Load Strategy, Notes Potential $25M+ in Q2 Upside if Expansion Comes

RBC Capital says Reddit’s ad load remains steady in the mid-teens, showing only slight variation versus May and March, suggesting the company is not aggressively monetizing near-term. While DAU trends remain the central debate, RBC sees ad load expansion as a future lever that could pull up performance across other monetized surfaces. SMB ad checks last week were incrementally more positive, aided by improved sentiment from Cannes. RBC estimates current ad load (~15%) is below industry norms, which often push past 20%, implying headroom for future growth. If Reddit moves closer to that level, Q2 revenue upside could exceed $25M. In the meantime, the firm views the stock as a high-quality, well-positioned name with long-term monetization optionality.

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TMTB: Part of the reason we thought the long set up was good on RDDT was our view positive quarterly checks should continue into the print - these are two of them and we should get more. As US DAU data continues to improve + ad checks come out strong, will be tougher for bears to hold onto to their position

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NVDA: Loop Capital Hikes PT to $250, Reiterates Buy; Says Gen AI Demand Points to $6T Market Cap Scenario