Reddit ARPU convergence with Meta

Reddit is essentially just a DAU (Reddit currently captures \~1.5% of the world population vs Meta's 44%) and ARPU convergence play with Meta, plus a free option on AI licensing deals. This week I dived deeper into the ARPU convergence with Meta. See below the results, showing Reddit vs Meta ARPU Convergence (2021 → 2025): \- **US:** 15% → 18% (still growth headroom of **5x** to reach Meta) \- **Europe and APAC:** 11% → 35% (headroom of **3x**) \- **ROW:** 4% → 15% (headroom of **7x**) As per above, Reddit has a clear historical track record of closing the ARPU gap vs Meta across *all* regions. Unlike Meta 20y ago, Reddit doesn't need to invent anything new - while Meta had to build digital advertising from scratch (higher execution risk), Reddit just needs to copy what works, hire ex-Meta engineers etc. The execution risk here is thus materially lower than what Meta faced, and the numbers show Reddit is delivering. Yet, despite this, at current prices, the market is pricing in a significant (over)skepticism given just how clear the growth path ahead is - both on DAU and ARPU front. The stock is still trading at c 25x forward earnings - outlined in my last week's post - and thus remains a no brainer buy at these levels. I continue to add to my position.