Companies file for an initial public offering when the stock market is receptive to paying the maximum price. Reddit (RDDT) filed its IPO on Thursday. It will earn the title of the first tech firm to list on the exchange.
Reddit generated $804 million in sales in 2023, growing by 20% Y/Y from $666.7 million. It issued a lofty total addressable market forecast of $1.4 trillion by 2027.
Cautious investors should be wary of Reddit’s forecast. The majority of Reddit’s user base is anti-capitalist. Users dislike advertising, for example. This decreases advertising volumes on the site.
Nvidia Alternatives
Nvidia’s (NVDA) best performance in over a year, up by 16%, will encourage investors to seek alternatives. Advanced Micro Devices (AMD) is a potential second choice. Its market capitalization is $265.5 billion, compared to Nvidia’s $1.94 trillion. Still, AMD is relatively cheaper for a reason. Its PC graphics card consumes more idle power and does not have the same feature set as that of Nvidia.
Savvy investors may buy Broadcom (AVGO) and Arista Networks (ANET) instead of Nvidia. Broadcom will enjoy higher sales of custom compute offloading and next-generation networking products. ANET stock, which fell after posting results, will rise as Arista switch sales increase. An increase in Nvidia GPU server sales will push Arista network switch sales higher.
