Reddit stock plunges 28% as Google AI cuts US traffic

Reddit's stock plunged about 28% on Friday, October 30, after the company reported its U.S. audience is shrinking due to Google's AI search features, despite third-quarter revenue jumping 53% to $895 million. U.S. daily users fell to 50.7 million, down 2.5 million from the prior quarter, with CEO Steve Huffman saying search referrals dropped by more than 1 million a week in October. Shares traded at $91, below their 52-week low of $119.27, as logged-out users declined 4% year-over-year. Reddit earns $60 million and $70 million annually from AI training deals with Google and OpenAI, but analysts worry AI Overviews reduce traffic more than those deals compensate. JP Morgan and Goldman Sachs cut price targets, while fourth-quarter guidance of $1 billion to $1.03 billion fell below analyst consensus.