Reddit's shares surged 15% on Friday after it reported quarterly results that exceeded Street expectations, boosting investor confidence in the platform's AI-based advertising tools and strong user engagement.

Reddit’s recently launched A.I. marketing tools are already fueling strong advertising growth. In the latest quarter ended June, the social media company reported a 78 percent year-over-year revenue increase to $500 million,

You can’t have artificial intelligence without actual intelligence,' the social media boss said during a Q2 earnings call this week. Investors seem to agree.

Reddit is going to be leaning even harder into search in the coming months. The company has already been working on a plan to integrate its LLM-powered search into its main search feature, but CEO Steve Huffman said he wants users to think of the site as an actual search engine.