Reddit is a social media platform built to survive and thrive in the artificial intelligence age, and it's a reason to buy the stock, according to KeyBanc Capital Markets. The bank initiated coverage on the company with an overweight rating and $225 price target. That represents a 26% gain from Tuesday's close. Analyst Justin Patterson wrote that Reddit's platform is a trusted platform with a robust online community. "We believe this makes Reddit complementary to search, social, web, and LLMs, providing the Company with a durable source of traffic," Patterson said. "In turn, Reddit's content can be monetized via ads and data licensing." RDDT 1Y mountain Reddit 1-year. He thinks the company is on pace to hit its long-term goal of 1 billion users. That drive will be enhanced by AI citations, where models that individuals use to discover information cite Reddit as the source for their response, the analyst noted. Investments in both community and advertising monetization could lead Reddit to find sustained annual revenue growth of more than 30%, Patterson added. Not to mention, at a time when many internet and technology companies are increasing their capital expenditures, Reddit's is less than 1% of its revenue. That gives Patterson confidence the company will convert its growing EBITDA margin into free cash flow. "RDDT is a unique way to participate in AI growth with an asset-light business model," Patterson wrote in the note. KeyBanc's bullish call comes during a tricky time for the stock. While shares are up more than 20% over the past three months, they are still down 22.4% year to date. Most analysts covering Reddit are bullish, however. LSEG data shows that 20 of 30 rate it a buy or strong buy.