Reddit stock plunges 30% as Google's AI search threatens traffic and user growth

Reddit shares fell roughly 30% after reports that Google's AI-generated search results are reducing the click-through traffic that feeds Reddit's user growth and advertising inventory. The transmission channel here is the platform dependency loop: Reddit has relied heavily on Google Search referrals for logged-out visitors, so any change in how Google surfaces answers directly compresses Reddit's traffic base and, by extension, its ad impressions and monetization outlook. Alphabet's GOOGL and GOOG shares are exposed in the opposite direction in terms of narrative, since the story frames Google's AI search as a competitive product shift that could either strengthen its engagement or erode the content ecosystem it indexes, creating two-sided sentiment around its core search franchise. Traders should watch Alphabet's next quarterly earnings call for commentary on search query volumes, AI Overviews adoption, and any disclosed changes to referral traffic, as well as Reddit's upcoming user and traffic metrics, which will show whether the decline is confined to Google-referred visits or broader.

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