Shares of Reddit and Robinhood rose sharply on Monday as social media-fueled retail trading appeared to be making a comeback.
Reddit rose 8.7%, hitting its highest level since March. Retail brokerage stock Robinhood climbed 4%, cutting some of its losses from last week.
The moves came as GameStop soared more than 74% following the apparent return of "Roaring Kitty," aka Keith Gill, the retail trader who was at the center of the meme stock phenomenon in 2021. Gill made several posts on his previously dormant X account starting on Sunday.
Both Reddit and Robinhood could theoretically benefit from a return of the retail trading frenzy. Reddit's WallStreetBets chatroom was highly active during that period, and increased retail trading could boost revenue at Robinhood.
Citizens JMP equity research analyst Andrew Boone said that while he didn't see any fundamental reason for Monday's rally for Reddit, increased user activity would help boost the company's advertising business.
"At the end of the day, more users means more impressions, which means there are more ads for them to sell," Boone told CNBC.
Reddit may also in the future be able to monetize its user base through data sales and a developer platform, Boone added.
Neither stock was public during the peak of the 2021 meme stock rally, however. Robinhood had its initial public offering in July 2021, while Reddit went public in March of this year.