Reddit stock slides 5.8% on report of traffic decline tied to Google AI

what happened

Reddit shares dropped 5.8% during afternoon trading after Business Insider reported, citing data from analytics firm Similarweb, that the platform's global visits fell 13% between October 2025 and October 2026. The publication linked the decline to Google's AI Overviews, which it said have reduced the search referrals Reddit depends on. Reddit's own metrics pointed the other way, with weekly active uniques up 16% year on year in October.

The move follows a much sharper sell-off a little over two weeks ago, when the stock lost 25.2% after third-quarter 2026 results and fourth-quarter guidance below Wall Street's expectations. Revenue of $895 million, up 53%, and diluted EPS of $1.40 both beat consensus. However, projected fourth-quarter revenue and adjusted EBITDA came in under analyst estimates. CEO Steve Huffman tied softer user activity to lower search referrals and warned that fourth-quarter daily active uniques could fall by a low-double-digit percentage.

why it matters

For investors, the episode shows how heavily Reddit's user growth leans on search traffic. The market's reaction suggests traffic concerns are being taken seriously but are not seen as a fundamental change to the business, given the stock's 59 moves greater than 5% over the past year.

market impact

Reddit shares: weaker search referrals add pressure on the stock

• ▼Reddit shares pressure down — weaker search referral traffic casts doubt on user growth

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