Reddit stock falls 29% as Google AI reduces search traffic, CEO warns of user decline
Reddit's stock dropped 29% on October 29, 2026, after the company warned that daily active users could fall by a low double-digit percentage this quarter due to Google's AI-driven search changes. Google's AI summaries and AI Mode now answer questions directly, reducing click-throughs to Reddit by over 1 million weekly visits in October. Despite the traffic loss, Reddit's Q3 revenue rose 53% to $895 million and EPS increased 75% to $1.40. CEO Steve Huffman stated 'Google is crawling us as hard as ever' but 'The reality is the AI Mode does not drive traffic.' Other publishers like People Inc. and Tripadvisor have also reported significant Google traffic declines.
Reddit's sharp stock decline highlights the vulnerability of platforms dependent on Google search traffic in the era of AI-powered search, raising concerns about sustainable business models when AI answers questions directly and diverts users away from traditional content sites.
Source: BeInCrypto · beincrypto.com