Reddit Shares Tumble 29% as Google's AI Traffic Shift Bites

Google’s crawling of Reddit is as intense as ever, but the search giant is no longer pointing users in Reddit’s direction. The change erased more than $7 billion in market value on Friday as shares plunged 29% to $91.73, Reddit’s worst single-day performance on record.

Reddit is not alone in the squeeze. Publishers, travel sites and image platforms have all told investors the same story: Google-supplied traffic is going away.

What Did Google Do Differently?

Google now handles many questions itself through AI-generated summaries and a chatbot-like AI Mode, which means fewer people click through to other sites.

“Google is crawling us as hard as ever”

That was Reddit CEO Steve Huffman speaking on October 29. Search referrals delivered Reddit more than 1 million fewer visits per week in October.

“The reality is the AI Mode does not drive traffic,” Huffman also said.

Reddit has cautioned that daily users could fall by a low double-digit percentage in the current quarter, translating to at least 13 million fewer people each day. Even with that warning, revenue jumped 53% to $895 million.

REDDIT $RDDT Q3’26 EARNINGS HIGHLIGHTS

🔹 Revenue: $895M (Est. $878.4M) 🟢; +53% YoY
🔹 EPS: $1.40 (Est. $1.35) 🟢; +75% YoY
🔹 Adj. EBITDA: $402M (Est. $399M) 🟢; +70% YoY

Users (Q3):
🔹 DAUq: 130.3M (Est. 133.4M) 🔴; +12% YoY
🔹 WAUq: 515.2M (Est. 531.1M) 🔴; +16% YoY

— Wall St Engine (@wallstengine) October 29, 2026

Alphabet, Google’s parent, lost roughly $500 billion on Thursday in a post-earnings selloff of its own as growth in search tapered to 12%.

Who Else Relies on Google Clicks?

People Inc. (PPLI), the publisher behind People magazine, saw Google search traffic fall 40% over the course of a year, Digiday reported.

Tripadvisor (TRIP) CEO Matt Goldberg blamed AI Overviews for the decline in spontaneous visits, per Skift.

Pinterest (PINS) warns its search traffic is beyond its own control, Barron’s noted. The stock fell nearly 8% on Friday after an earnings miss.

Homework-help business Chegg has sued Google over AI summaries. Its shares have slid from $113 in 2021 to about $1.

Could Chegg’s Fate Await Reddit?

Reddit’s defense rests on its loyal users. Chief Operating Officer Jen Wong says more than 80% of its revenue comes from logged-in and app users.

Reddit posts also feed AI. Market account Bull Theory says AI pulls roughly 40% of its answers from Reddit threads. Google and OpenAI are reported to pay about $60 million and $70 million a year, respectively, to license that content, all while Reddit’s Google licensing deal nears expiry.

This makes no sense.

AI pulls about 40% of its answers from Reddit threads.

Yet $RDDT crashed 29% today after warning that its daily users could fall by double digits next quarter because of AI.

CEO Steve Huffman says Google’s AI now answers questions directly, so fewer…

— Bull Theory (@BullTheoryio) October 30, 2026

After the crash, Reddit still trades at 19 times expected earnings, versus 7.5 for Snap, according to Reuters data.

This quarter’s user count will show whether a loyal user base can make up for the clicks Google used to send.