April 12 Reuters J.P.Morgan and Morgan Stanley started coverage on Reddit with equivalent to hold ratings, as they wait for clarity on the social media company39;s user growth, while staying bullish on adrevenue growth and artificial intelligence AI initiatives.

Shares of Reddit were up 0.88 at 42.64 in premarket trading.

While Reddit, which made its market debut last month, still relies on advertising for the vast majority of its revenue, it touted AI in its initial public offering IPO marketing roadshow as an area of growth.

J.P.Morgan started coverage on Reddit with a neutral rating and a 47 price target, while Morgan Stanley initiated with an equalweight rating and a 45 price target.

DAUq daily active unique users growth has accelerated in recent quarters and there is meaningful headroom for growth, but for now Reddit39;s base of 73 million users is relatively subscale, said J.P.Morgan analysts led by Doug Anmuth in a note.

Valuation leaves us on sidelines as we wait for evidence of outsized user growth and faster execution, said Morgan Stanley.

Morgan Stanley, Goldman Sachs, JPMorgan and Bank of America were among over a dozen underwriters for the IPO, all of whom had to wait till mid April to start coverage as required by industry practice.

With a 50 price target, both Piper Sandler and Roth MKM were the most bullish on the stock with overweight and buy ratings, respectively.

Piper views Reddit as an iconic internet asset, while Roth said Reddit, which is…