Analysts Defend Reddit Stock Amid ChatGPT Citation Concerns

Market Reacts to ChatGPT Citation Data

Shares of social media platform Reddit (RDDT) experienced a notable drop this week following the release of a study with significant implications for the company's AI data licensing strategy. The study revealed that on a single day, content from Reddit was cited in only 2% of responses from OpenAI's ChatGPT. This figure marks a steep decline from the previously observed average of 9.7%, raising questions among investors about the ongoing value and utilization of Reddit's data by major artificial intelligence models.

Analysts Defend Reddit's Long-Term Value

Despite the market's bearish reaction, analysts from Seeking Alpha have been quick to defend the company's position. They rushed to support Reddit post-selloff, suggesting that the study represents a single data point rather than a definitive trend. The bullish perspective holds that Reddit's vast and constantly updated archive of human conversation remains a critical resource for training large language models. The recent dip is seen by some as a potential overreaction, with analysts emphasizing the company's broader value proposition beyond just its immediate utility to one specific AI chatbot.