Reddit Vs. Chewy: The Better Buy Stock In 2026

By Alex Sirois Published Jul 2, 12:40PM EDT

Quick Read

Reddit's 69% revenue growth and 40% EBITDA margin dwarf Chewy's single-digit equivalents, exposing two fundamentally different business models.
Reddit's confirmed AI licensing deals with Google and OpenAI create high-margin revenue streams Chewy's warehouse-bound model structurally cannot replicate.
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Reddit Vs. Chewy: The Better Buy Stock In 2026 — © stockcam / iStock Unreleased via Getty Images

Reddit (NYSE: RDDT | RDDT Price Prediction) and Chewy (NYSE: CHWY) just posted fresh quarters that read like opposite chapters of the same internet economy. Reddit is selling words, communities, and the data that trains AI models. Chewy is selling kibble, prescriptions, and recurring shipments. Both stocks have whipsawed in June, and both businesses now look very different under the hood.

One Sells Conversations. One Ships Kibble.

Reddit’s Q1 print landed with advertising revenue of $625 million, up 74% year over year, and total revenue of $663.41 million at a 40.1% adjusted EBITDA margin. CEO Steve Huffman framed the platform as “a one-of-one business powered by deeply engaged communities and authentic human conversation”, with 126.8 million daily uniques and global ARPU at $5.23. Capex was a rounding error at $1.09 million. That is the picture of a platform monetizing language itself.

Chewy’s quarter looks heavier in every sense. Revenue rose 7.7% to $3.357 billion, with Autoship sales hitting $2.833 billion, or 84.4% of net sales. Sumit Singh pointed to “record profitability” and nearly 200,000 net customer additions. Gross margin reached 30.1%. Real progress, but still a fraction of Reddit’s software economics.

Data Licensing Versus Pallets and Pharmacies

Lens	Reddit	Chewy
Revenue growth	69.1%	7.7%
Adj EBITDA margin	40.1%	7.5%
Quarterly capex	$1.09M	$37.7M
Buyback authorized	$1.0B	$200M in Q1

Reddit’s AI angle is concrete and already monetized. Huffman confirmed “real partnerships with Google and OpenAI”, and Jim Cramer described the site as “a database of human conversations on the Internet” essential for training models. Chewy’s economics are bound by warehouses, pet food, and freight, a structural ceiling on net margins even as Autoship penetration climbs from 82.2% to 84.4%.

The Next Test Is Whether Reddit’s ARPU Keeps Climbing

I want to see if Reddit can push international ARPU, still $2.02 versus $9.63 in the US, anywhere near domestic levels. Q2 guidance of $715M to $725M sets the bar. For Chewy, you should keep an eye on whether nearly 200,000 net adds repeat as the “more dynamic consumer backdrop” wears on pet owners.

Why Reddit’s Setup Looks More Compelling, With Caveats

Personally, Reddit’s combination of 47 P/E, 69% growth, and one-million-dollar capex appeals to me more than Chewy’s grind. The AI licensing optionality is real, and the $1 billion buyback says management agrees. That said, RDDT is down 24.14% year to date, and r/wallstreetbets calling it “the most misunderstood stock on Wall Street” is the kind of cheerleading I treat as a yellow flag. For investors researching defensive recurring-revenue names after a 54.66% one-year drop, Chewy screens as a turnaround candidate worth monitoring. Reddit’s next ARPU print remains the key catalyst to watch.

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About the Author Alex Sirois →

Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.

Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.

At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.