Despite fears that artificial intelligence could eat into their dominance, major internet platforms like Meta (META), Alphabet (GOOG), and Reddit (RDDT) are proving their staying power.
According to a fresh research note from Citi following meetings at the Cannes Lions Festival, advertisers are holding steady on budgets, and demand for targeted ad platforms remains strong. As a result, the bank reiterated Buy ratings for all three companies and raised financial forecasts.
Meta led the charge with shares climbing nearly 2% to over $711, as the company’s $14.3 billion investment in Scale AI signaled a bold bet on the future of data. Alphabet also saw gains after Citi analysts praised momentum in YouTube advertising and raised revenue projections for both 2025 and 2026. Meanwhile, Reddit’s unique data trove and surging ad growth drew increased attention from Wall Street, helping push the stock more than 5% higher.
The broader Nasdaq followed suit, buoyed by optimism that online platforms are evolving to meet the demands of an AI-driven advertising world without sacrificing user engagement or profitability.
Reddit Emerges as the Market’s Quiet Powerhouse
Reddit’s transformation from meme stock to serious tech contender continues to gain traction. The company’s Q1 2025 results were nothing short of impressive: revenue soared 61% year-over-year to $392 million, while net profit hit $26 million after posting a loss the previous year. Daily active users rose to 108 million, up 31% year-over-year, and gross margins improved to a robust 90.5%.
Analysts are taking notice. Morgan Stanley gave Reddit an “Overweight” rating and a $200 price target, while B. Riley sees it reaching $220, citing the platform’s data as a high-value asset in the AI economy. Reddit’s upcoming addition to the Russell 3000 Index later this month could also drive demand from institutional investors, who manage more than $10 trillion linked to Russell indexes.
Strategic ad partnerships—like the one with CVS Health (CVS) to tie digital campaigns to in-store purchases—are helping validate Reddit’s advertising model, and new measurement tools from Integral Ad Science have made the platform more attractive to big brands.
Reddit’s transformation from meme stock to serious tech contender continues to gain traction. The company’s Q1 2025 results were nothing short of impressive: revenue soared 61% year-over-year to $392 million, while net profit hit $26 million after posting a loss the previous year. Daily active users rose to 108 million, up 31% year-over-year, and gross margins improved to a robust 90.5%.
Analysts are taking notice. Morgan Stanley gave Reddit an “Overweight” rating and a $200 price target, while B. Riley sees it reaching $220, citing the platform’s data as a high-value asset in the AI economy. Reddit’s upcoming addition to the Russell 3000 Index later this month could also drive demand from institutional investors, who manage more than $10 trillion linked to Russell indexes.
Strategic ad partnerships—like the one with CVS Health (CVS) to tie digital campaigns to in-store purchases—are helping validate Reddit’s advertising model, and new measurement tools from Integral Ad Science have made the platform more attractive to big brands.
Broadcom and AMD Ride the AI Wave in Infrastructure and Innovation
Beyond digital ad platforms, tech hardware players like Broadcom (AVGO) and AMD (AMD) are also making waves in the AI economy. Broadcom reported $15 billion in quarterly revenue, fueled by $6.6 billion in software sales and $8.4 billion in semiconductor business. Analysts at Bernstein raised their price target to $295, citing strength in AI infrastructure and growing revenue streams from the company's $30 billion AI division.
Broadcom’s 2023 acquisition of VMware is helping bolster its infrastructure software presence, while consistent cash flow—$6 billion in the latest quarter—supports its 14-year streak of dividend increases. The stock’s yield currently stands at 0.94%.
Meanwhile, AMD is pivoting aggressively into next-gen data centers and AI computing. The chipmaker’s recent collaborations with HCLTech and Keysight Technologies are speeding up development of AI applications and PCIe 6.0, a faster data interface critical to high-performance computing. Despite losing market ground in the past year, AMD has surged back in recent weeks, with shares jumping over 6% on Tuesday following news of joint AI innovation labs and new chip demonstrations.
Internet and Infrastructure Stocks Show Staying Power
From Meta’s aggressive AI investments to Reddit’s skyrocketing ad revenue and Broadcom’s infrastructure dominance, leading tech and internet stocks are adapting quickly to a world reshaped by artificial intelligence. While headwinds like competition, regulation, and market volatility remain, recent results and bullish analyst sentiment suggest the sector still offers significant upside.
Investors searching for growth in a choppy economic environment may find opportunity in these high-conviction names—each playing a distinct role in shaping the digital and AI-powered economy of tomorrow.
From Meta’s aggressive AI investments to Reddit’s skyrocketing ad revenue and Broadcom’s infrastructure dominance, leading tech and internet stocks are adapting quickly to a world reshaped by artificial intelligence. While headwinds like competition, regulation, and market volatility remain, recent results and bullish analyst sentiment suggest the sector still offers significant upside.
Investors searching for growth in a choppy economic environment may find opportunity in these high-conviction names—each playing a distinct role in shaping the digital and AI-powered economy of tomorrow.
Considering a $1,000 investment in these companies?
Our team at Stock Investor carefully curated a list of top stocks with the potential for significant returns, suitable for beginners and seasoned investors alike who are eager to learn a trade and unearth the best stocks to buy. Though not featured in this article, these selected stocks could be game-changers in the future.For those seeking dynamic trading experiences, consider joining our Swing Trade Alerts, Option Income Alert, or our Trading Room. Take advantage of our special offer today, starting at just $1 in the first month.
Unlock the secrets of Smart Money
Explore how billionaires and institutions are influencing the market. Follow their every move with DarkOption Flow and stay updated on essential market insights. Begin your journey to informed investing today!
Education
And if you're a fan of Invest opedia, you'll appreciate what we offer at SharperTrades even more. Explore our comprehensive option trading course and technical trading course, where you can learn trading, analyze stocks, delve into chart patterns for stocks, and gain invaluable insights for making the best company investments.
Unlock Your Stock Market Edge with SharperTrades. Dive into powerful trading tools, learn a trade, and receive expert guidance. Stay up-to-date with regular market updates. Learn trading, basics of investing, and how to pick the best stocks to buy. Whether you're a beginner or seasoned investor and trader, we've got you covered. Get started for free, today!