Reddit Shares Plunge 30% to $90.15 as Google AI Search Cuts Referral Traffic, Q4 User Forecast

Reddit shares fell 30.44% to $90.15 on Friday after CEO Steve Huffman warned that Google's AI-powered search features are reducing referral traffic and could shrink the platform's daily user base. The selloff followed third-quarter results with a weaker-than-expected current-quarter revenue forecast. Revenue rose 53% year over year to $895 million, advertising revenue gained 54% to $847 million, and net income reached $283 million. Diluted earnings per share came in at $1.40, up 75% and above the $1.33 analyst consensus. Daily active unique visitors totaled 130.3 million, up 12% but below the roughly 134 million expected; U.S. users fell 2% to 50.7 million. On Thursday's earnings call, Huffman said Google search referrals had fallen by more than one million per week on average in October, accelerating late in the quarter. He said Google's AI Overviews and AI Mode, which answer queries directly in search results, do not drive traffic. Reddit said the pace could cut total daily active users by a low double-digit percentage in the fourth quarter from about 130 million. The stock has lost 44% over the past week, with its 50-day moving average below the 200-day average, forming a death cross.