Reddit shares plunge 29% on the stock market as Google’s AI siphons off its traffic

Reddit shares plunged 29.22% after the company issued disappointing guidance, with investors citing Google's AI features as a growing threat to the social platform's traffic. The company also disclosed it is testing mandatory login requirements, a move that could further affect user access and engagement. The stock drop reflects mounting concerns that AI-generated answers, increasingly surfaced directly in Google search results, are reducing the referral traffic that has been a key driver of Reddit's user growth and advertising revenue. The guidance disappointment compounds pressure on a platform whose valuation has leaned heavily on expectations of continued traffic expansion. Investors should watch upcoming user and engagement metrics, any formal rollout of the mandatory login policy, and the extent to which Google's AI Overviews continue to divert search traffic away from Reddit.