Reddit (RDDT) surged 5.20% during intraday trading on Monday, staging a strong recovery from a sharp 22% selloff recorded on July 31. The rebound reflects renewed investor confidence as the market reassesses the company's fundamentally strong quarterly performance.

The prior selloff came despite Reddit reporting Q2 results that significantly exceeded expectations. Revenue reached $804.9 million, up 61% year-over-year and well above the consensus estimate of $730 million. Adjusted earnings per share of $1.25 beat the $0.95 estimate by 31.58%, while Q3 revenue guidance of $860-$870 million also topped the Street consensus of $828 million. The earlier decline was triggered by slowing U.S. daily active user growth, which decelerated from 7% to 6% quarter-over-quarter, along with concerns over search traffic volatility from AI-driven changes.

With the stock trading at deeply discounted levels following the selloff, the combination of robust earnings and attractive valuation created strong recovery demand, driving the intraday rebound. Multiple analysts maintained positive ratings despite lowering price targets, with Wedbush cutting to $221 from $250 while keeping an Outperform rating, and KeyBanc initiating coverage with an Overweight rating and $225 target.