Reddit Joins S&P 500 Index as Shares Surge 10%

Reddit Inc. shares surged more than 10% in extended trading on Thursday following an announcement from S&P Dow Jones Indices that the company will be included in the S&P 500. The social media platform will join the benchmark index before trading begins on August 18, replacing AvalonBay Communities Inc., which is currently being acquired by Equity Residential. Reddit becomes the second pureplay social media company in the index, joining Meta Platforms Inc.

The inclusion comes during a period of significant stock volatility. Although the company reported its eighth consecutive quarter of sales growth exceeding 60% in July, its stock had declined 31% year-to-date through Thursday. CEO Steve Huffman previously linked recent search referral volatility to Google's Gemini-powered AI Overviews.

To leverage the artificial intelligence boom, the company has entered into data-sharing agreements with Google and OpenAI. While these deals aim to stabilize and grow the business, investors have indicated a desire for additional partnerships of this nature.