Reddit Stock Plunges 30% as Google's AI Search Hits Traffic and User Growth

Reddit shares have tumbled 44% this week, including a 30% single-day drop, after CEO Steve Huffman warned that Google's AI-powered search features are reducing referral traffic to the platform. The company also reported weaker-than-expected user growth and issued disappointing fourth-quarter guidance, compounding investor concerns. Huffman noted that changes in Google's search results, which increasingly surface AI-generated answers, have led to fewer clicks through to Reddit threads. This shift threatens the community-driven site's ability to attract new users and advertisers. The stock decline reflects broader market anxiety about how AI-driven search could disrupt web publishers that rely on organic traffic. Reddit's struggles highlight the growing tension between content platforms and tech giants that control search distribution. As Google prioritizes its own AI overviews, sites like Reddit may need to adapt their strategies to maintain visibility. The coming quarters will test Reddit's resilience as it navigates a rapidly evolving search landscape.