TMTB Morning Wrap

Good morning. Futures +15bps. Reminder, no jobs report today bc the gov’t shutdown. Main macro report is US services ISM at 10am. China -1%. BTC and yields flattish.

New AI app on top the App store this morning…Guess who…:

---

Lots to get to, so let’s get straight to it…

---

RDDT: Piper Reiterates Overweight, $290 PT Despite Traffic Concerns from ChatGPT After Speaking with IR

Piper notes Reddit shares slid about 18% this week following reports that traffic from ChatGPT dropped in September, but the firm stresses this appears tied to how citations are displayed rather than a shift in data usage. After speaking with IR, Piper says Reddit does not believe OpenAI has changed how it uses their data, emphasizing that primary traffic sources remain direct and Google, not LLMs. The firm highlights that new footnote formats in ChatGPT may be disrupting how content is presented but management continues to view Reddit’s data as valuable for LLMs.

---

RDDT: Citizens Reiterates Market Outperform, Highlights Logged-In Ad Monetization Edge

Citizens reiterates its Market Outperform rating and $300 price target on Reddit, arguing that logged-in user monetization provides significant upside as the platform scales its ad tools. The firm notes U.S. logged-in users monetize at more than 10x the rate of logged-out users, and estimates $59.48 in 2025 ARPU compared to just $4.33 for logged-out traffic, underscoring the importance of user engagement. Citizens says logged-in users spend 20–25 minutes per day on the app, representing over 90% of ad revenue allocation, while highlighting that monetization is a more immediate driver than user growth over the next two to three years. The firm also points out that Reddit’s 2025 logged-in user ARPDAU of just 23% of Meta’s suggests ample runway to improve as formats like Reddit Max, shopping ads, and improved targeting scale.

---

AMZN: Goldman Reiterates Buy, PT Raised to $275 on AWS Growth Path and Ad Tailwinds