Reddit stock plunges 25% as Google AI cuts traffic and revenue forecast disappoints

Reddit shares plunged 25% on Friday, on pace for their worst day ever, after the company forecast weaker-than-expected fourth-quarter revenue and cited declining traffic from Google's AI-powered search. The stock traded at $96.85, down 44% since the start of the year, with the drop threatening a record single-day loss and a 12-month closing low. Reddit reported third-quarter revenue of $895 million, up 53% year-over-year, with net income of $283 million and diluted EPS of $1.40, up 75%. Global daily active uniques rose 12% to 130.3 million, but U.S. figures fell 2% to 50.7 million, missing analyst expectations of 133.7 million. CEO Steve Huffman said referral traffic declines will continue in the fourth quarter, prompting plans to make account registration mandatory, with trials outside the U.S. starting soon. Reddit is also negotiating a renewal of its $60 million annual data-licensing deal with Google, which expires soon, while other revenue from data licensing grew 35% to $48 million in the quarter.