Reddit (NYSE:RDDT) has come out of the gate strong since its initial public offering in March of this year, and Reddit stock still is a serious buy. The online message board and discussion forum company that’s home to the notorious WallStreetBets subreddit, has seen its share price rise 20% since its first day of trading on March 21.

Not only did Reddit execute a successful IPO, but in the two months since going public, the company has issued strong quarterly financial results and announced a new strategic partnership that’s likely to power future growth.

A Solid IPO

Reddit pulled off one of the largest and most successful IPOs since before the Covid-19 pandemic in 2019. Because of strong demand, the company could price its IPO at $34 a share, the top end of the expected range.

The stock offering raised $519 million for the company and valued it at $6.5 billion. Reddit sold 15.28 million shares in the IPO offering, while existing shareholders and employees sold another 6.72 million shares.

Wall Street was watching the IPO closely not only because of its size, but also because it was the first stock market debut of a social media company since Pinterest (NYSE:PINS) went public in 2019.

Reddit had long delayed its IPO because of the pandemic and subsequent bear market in 2022. Concerns were alleviated as RDDT stock made a strong debut on the New York Stock Exchange and, despite some volatility in the first few days, has managed to hold on to its gains.

Encouraging Earnings

Six weeks after its market debut, Reddit reported its first quarterly financial results as a publicly traded company. The results were so good that they sent Reddit stock up 15% in a single trading day.

The company reported a loss per share of $8.19, which was not as bad as a loss of $8.71 that was expected among analysts. Revenue in the quarter totaled $243 million, which was far ahead of the $212.8 million expected on Wall Street. The still unprofitable company said its sales rose 48% from a year earlier.

Reddit also reported $222.7 million in online advertising revenue for the quarter, up nearly 40% year over year. The company had 82.7 million daily active users at the end of Q1, more than the 76.6 million expected by analysts.

Average revenue per user rose 8% to $2.94. Looking ahead, management said they expect revenue of $240 million to $255 million for the current second quarter, topping expectations of $224 million. By all accounts, Reddit’s first print was a home run.

Push Into AI

Most recently, Reddit has announced a new strategic partnership with privately held artificial intelligence startup company OpenAI. News of the partnership drove Reddit stock up another 11% in one day.

The OpenAI deal should attract more users to Reddit’s platform through AI-enhancements. OpenAI has also agreed to become an advertising partner of Reddit and run ads on its message boards.

Advertising is important as Reddit generates nearly 100% of its revenue from online ads on its message boards. The partnership also allows Reddit to leverage OpenAI’s technology, including its ChatGPT platform, to build tools and features that will enhance Reddit’s content.

The company has said it plans to use AI to attract more eyeballs and build on its more than 80 million daily active users.

For its part, OpenAI will use Reddit’s posts to train it artificial intelligence models, including ChatGPT.

Buy Reddit Stock

It’s still early days. But Reddit has managed to impress with a successful IPO and a strong earnings print. Those are two hurdles that most newly public companies stumble over.

Reddit is adapting AI technologies and using them to its advantage. The partnership with OpenAI should provide a tailwind for the company and its share price. For all these reasons, it makes sense to be bullish on the social media concern. Reddit stock is a buy.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.