Reddit Shares Plunge 30% After Company Says Its Q3 Search Traffic Was "Down Meaningfully"
News Source
โขFri, 30 Oct 2026 18:16:49 +0000
๐ฐ What Happened
Reddit shares fell about 30% on Friday to roughly $90.20 after the company said search referral traffic was 'down meaningfully' in the third quarter, with the decline accelerating later in the period. The stock has now fallen 60% in 2026.
๐ The Backstory
The drop came a day after Alphabet lost $500bn in market value on a Google slowdown, underlining how much AI search is reshaping referral traffic for platforms and publishers. Reddit's Q3 results actually beat forecasts, with revenue up 53% to $895m and earnings per share of $1.40 against 80 cents a year earlier.
๐ฏ Why It Matters
Investors were rattled by guidance: fourth-quarter revenue of $1bn to $1.03bn fell short of the $1.05bn consensus, and daily users fell 2% with a possible low-double-digit percentage decline from 130 million. Reddit argues AI search 'does not fulfill people's fundamental need for community', a claim now facing a revenue test.
Reddit shares fell about 30% on Friday to roughly $90.20 after the company said search referral traffic was 'down meaningfully' in the third quarter, with the decline accelerating later in the period. The stock has now fallen 60% in 2026.
The drop came a day after Alphabet lost $500bn in market value on a Google slowdown, underlining how much AI search is reshaping referral traffic for platforms and publishers. Reddit's Q3 results actually beat forecasts, with revenue up 53% to $895m and earnings per share of $1.40 against 80 cents a year earlier.
Investors were rattled by guidance: fourth-quarter revenue of $1bn to $1.03bn fell short of the $1.05bn consensus, and daily users fell 2% with a possible low-double-digit percentage decline from 130 million. Reddit argues AI search 'does not fulfill people's fundamental need for community', a claim now facing a revenue test.