Reddit just had maybe the best quarter of any social platform this year… revenue up 61%, profit almost tripled, users up 18%.
Stock dropped 20% anyway (it was down 23% at the lows, per CNBC).
Why? Four words buried in the investor letter: "search referrals were choppy."
That's it. That's the crash.
Basically most new people find Reddit by googling stuff. And Google's AI now just answers the question right there on the results page, so nobody clicks through…. so Wall Street ignored the great numbers and focused on one fear: if Google stops sending people, where does Reddit's growth come from?
And here's the part that actually breaks my brain: Reddit sells its content to Google to train that same AI… Google pays Reddit for the data, then uses it to answer questions so people don't visit Reddit.
The CEO got on the call and said people don't want AI summaries they want Reddit. The market listened to that argument and took the stock down 20%.
source:
https://www.cnbc.com/2026/07/31/stocks-making-the-biggest-moves-midday-aapl-amzn-rddt-gddy-iesc.html
Reddit grew revenue 61% and nearly tripled profit. The stock fell 20%+ today because of four words: "search referrals were choppy"
byu/valbolt inStockMarket
Posted by valbolt
6 Comments
I personally want AI summaries.
Share price is about growth and future potential. If you say something bad about either, a drop is expected.
Stocks are stupid. Buy the dumpster fires and sell fomo
How heavy are your bags? $200 entry?
Meanwhile, Google’s terrible AI regurgitates a garbage answer and you still need to click a bunch of buttons before getting to the right Reddit page to get the actual information.
Honestly, Google AI is so bad that it only adds an extra barrier to getting your information.
People realized the only realistic way to explain the numbers was that it is being heavily botted.