Reddit shares sink 29% on Q4 outlook as Google AI cuts traffic

Reddit shares fell 29% after the company issued a fourth-quarter outlook that unsettled investors, with Google's AI-driven search changes casting a shadow over the platform's traffic.

The sell-off puts a spotlight on how heavily platforms and publishers depend on search referrals. One analysis found 58% fewer clicks to publisher sites when Google's AI Overviews appeared on the results page. Because these summaries answer a query directly in search, users have less reason to click through to the pages behind the answer.

Why it matters

Reddit's discussions have long surfaced prominently in Google results, so any change in how Google presents answers can feed quickly into visits. A traffic slowdown matters for a company whose business expectations rest on audience size and engagement. The 29% drop shows how sharply markets can react when forward guidance suggests that a key source of visitors is weakening.

The 58% figure comes from a single analysis and covers publisher sites in general, not Reddit specifically. It is best read as an indicator of a wider trend rather than a precise measure of Reddit's own exposure to Google's AI features.

What comes next

The episode adds to a growing debate over how AI-generated answers reshape the web's traffic flows. For Reddit, attention now turns to how it manages its dependence on search as Google continues to expand AI Overviews, and whether its fourth-quarter results reflect the cautious outlook. For publishers, the analysis is another data point suggesting that visibility in search no longer guarantees visits.