Reddit shares fell 30.44% to $90.15 on Friday, extending their weekly loss to 44%, after the company warned that Google’s artificial-intelligence search tools were reducing referrals to the discussion platform and could weigh on user numbers.
The sharp decline came despite a strong third-quarter performance. Investors focused instead on Reddit’s weaker-than-expected fourth-quarter outlook and comments from Chief Executive Steve Huffman about the growing impact of Google’s AI Overviews and AI Mode.
Strong quarterly results overshadowed by weak guidance
Reddit reported third-quarter revenue of $895 million, an increase of 53% from the same period a year earlier. Advertising revenue, the company’s main commercial engine, rose 54% to $847 million. Net income reached $283 million, while diluted earnings per share climbed 75% year over year to $1.40. That exceeded the $1.33 consensus estimate cited in the report.
The audience figures were less convincing. Reddit recorded 130.3 million daily active unique visitors, up 12% year over year but below the approximately 134 million analysts had expected. Daily active unique visitors in the United States fell 2% to 50.7 million.
For the fourth quarter, Reddit forecast revenue of between $1 billion and $1.03 billion. That range was below the roughly $1.05 billion expected by analysts, adding to the pressure on the stock after the earnings release.
Google’s AI search changes the referral model
Reddit has historically benefited from people reaching its discussions through Google searches. Those visitors can become users, return to the site and contribute to advertising activity. Google’s newer AI search functions, however, increasingly provide summaries and answers directly within the search page.
That means people may be able to read information drawn from Reddit discussions without clicking through to Reddit. Conventional search links are also pushed lower on the page as AI-generated answers take more prominent positions.
Speaking on the company’s earnings call, Huffman said Google search referrals had declined by more than 1 million per week during October. He said the fall had accelerated toward the end of the third quarter. If the pattern continues, Reddit’s daily active users could decline by a low double-digit percentage in the fourth quarter from a current base of about 130 million.
Huffman attributed the pressure to the expansion of Google’s AI Overviews and AI Mode in the United States and international markets. “The AI mode does not drive traffic, not for us and not to anybody as far as I know,” he told investors, according to Decrypt.
The issue is broader than a decline in new visitors. Search referrals can also return existing users to a platform, so fewer clicks may affect both user acquisition and engagement. For Reddit, that creates a direct link between changes in how Google presents information and the potential growth of its advertising business.
Reddit seeks more control over access and content
Reddit is attempting to reduce its reliance on search traffic by moving toward a more heavily logged-in experience. The company plans to begin testing a requirement for users to sign in before accessing most of the platform in selected markets outside the United States during the fourth quarter.
The company’s position in the artificial-intelligence ecosystem adds another layer to the situation. In February 2024, Reddit signed a reported $60 million-a-year data-licensing agreement with Google, giving the search company access to Reddit discussions for training AI models. Reddit later announced a similar arrangement with OpenAI, allowing the ChatGPT developer to use Reddit content while giving Reddit access to OpenAI technology.
These agreements create a way for Reddit to generate revenue from its large archive of user conversations. At the same time, AI-powered search products that draw on such content can reduce the need for users to visit the original platform. Reddit has also tightened access to its public data and moved toward a more restricted platform, a shift that has angered some long-term users.
At $90.15, the stock was far below its recent levels. The technical indicators cited in the report also showed a large gap between the current price and longer-term trend measures. Reddit’s 50-day exponential moving average was around $149.80, while its 200-day average was near $162.12. The 50-day average had fallen below the 200-day average, a pattern commonly known as a death cross.
Market picture
Moneyiar market data at 12:43-12:44 on November 1, 2026, showed mixed performance among the listed assets:
- Four (FORM) was at $0.2091802103, up 3.44% over 24 hours and down 4.72% over seven days.
- AKEDO (AKE) was at $0.0091063303, down 21.85% over 24 hours and 68.66% over seven days.
- AI Rig Complex (ARC) was at $0.042168976, down 0.29% over 24 hours and 31.81% over seven days.
- RedStone (RED) was at $0.1355140042, up 1.95% over 24 hours and down 4.85% over seven days.
The data covers separate digital assets and does not measure Reddit’s share price. Reddit’s immediate market reaction was instead driven by concerns over search referrals, user growth and the company’s fourth-quarter revenue outlook.
