Coatue Management disclosed a significant $1 billion stake in Reddit as of the fourth quarter. The stock of Reddit has experienced a remarkable surge, nearly tripling since October, supported by strong earnings reports.
The hedge fund has also announced a reduction of its holdings in Chinese stocks and established new positions in various technology companies. This revelation comes from a closely tracked hedge fund that made a sizable investment in Reddit last quarter.
Led by Philippe Laffont, a former Tiger Management employee, Coatue Management reported a stake comprising 6.5 million shares in the social media platform within its latest 13F filing. This filing, submitted to the SEC last week as of December 31, indicated that the nearly $1.1 billion stake in Reddit constituted approximately 3.6% of Coatue’s extensive $59 billion portfolio of publicly traded stocks.
According to Bloomberg, the hedge fund achieved a 19% return in 2024, compared to the S&P 500’s gain of around 23%. The recent investment in Reddit is already turning out to be profitable, likely assuming the hedge fund has retained its shares through this current year.
At present prices, Coatue’s Reddit stake is valued at around $1.2 billion, reflecting a year-to-date increase of $141 million, given the assumption that they are still holding onto the stock. Although the specific price point for the stock purchase remains undisclosed, Reddit shares have rallied by 14% in 2025 and have increased by 193% over the past five months. In contrast, the S&P 500 has returned 4% year-to-date.
The substantial rise in Reddit’s stock can be attributed to a strong earnings report for the third quarter, revealing a surprise profit, a 68% increase in year-over-year revenue, and a 47% increase in daily active users, released in late October. The stock reached its peak at approximately $228 per share on February 10 but has since experienced a decline of about 20%. Investors are currently analyzing Reddit’s fourth-quarter earnings results from the previous week, which indicated a 52% rise in expenses, along with a traffic disruption attributable to modifications in Google’s search algorithm.
“We expect Reddit to make further progress in its full-funnel diversification while achieving robust revenue growth and enhanced profitability,” analysts at JPMorgan noted in a recent report, highlighting that forthcoming changes to Google search could pose a long-term risk. The bank maintains a “Neutral” rating on Reddit, suggesting it is trading at a fair value with a price target of $185.
During the fourth quarter, Coatue also took significant actions by substantially selling off its Chinese stock holdings and initiating new positions in companies such as Charles Schwab, Affirm, Okta, and Datadog. The three largest holdings for Coatue as of December 31 included Amazon, Meta Platforms, and Taiwan Semiconductor Manufacturing Company.
