Reddit Stock Price Plunges 30% Due to Decline in Google AI Search Traffic
2026-10-31 05:54:27
According to CoinMeta, the stock price of Reddit plummeted by 30.44% on Friday to $90.15 due to a warning from CEO Steve Huffman that Google's AI search-driven feature was reducing traffic and could potentially shrink the platform's user base. Despite the company reporting strong third-quarter performance, revenue forecasts for the current quarter fell short of expectations. Reddit's third-quarter revenue increased by 53% year-over-year to $895 million, with advertising revenue growing by 54% to $847 million and net revenue reaching $283 million. Nevertheless, Reddit reported 130.3 million daily active users, which was lower than analysts' expected 134 million. In the United States, the number of users actually decreased by 2% to 50.7 million, raising doubts among investors about whether the platform can maintain growth. Huffman stated during the financial report conference call on Thursday that Google search recommendations traffic decreased by more than 1 million times per week in October, and this downward trend accelerated at the end of the third quarter. If this trend continues, Reddit's daily active users may decline by double-digit percentages in the fourth quarter.
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Source:Decrypt
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