A 29% drop in one day
On Friday, October 30, Reddit's stock fell 29%. That's its biggest one-day drop since it went public in 2024.
The surprising part? The business is doing well. Q3 revenue hit $895 million, up 53%, and beat Wall Street's estimates. The problem was the forecast: Reddit expects $1.00 to $1.03 billion in Q4 revenue, below the roughly $1.05 billion analysts wanted.
The AI search factor
You ask a question on a search engine, and an AI answer shows up right at the top. Super handy. But fewer people click through to the sites behind the answer.
Reddit says search sent it over a million fewer visits per week on average in October. It had 130.3 million daily active uniques in Q3, and warned that number could fall by a low double-digit percentage in Q4 if the trend continues.
Reddit's move: a mostly logged-in Reddit
Reddit's answer is to shift to a mostly logged-in experience, starting with tests in select markets outside the US this quarter. Incognito browsing stays. The exact line between logged-in and logged-out isn't defined yet, and Reddit says so.
Reddit's bet is simple: AI can answer questions, but it can't replace real people sharing real experiences. Honestly, that's a strong card to hold.
What it means for your money
- AI is changing where web traffic goes. Sites that lived on search clicks now need people who come back on purpose.
- Growth and guidance are two different things. Reddit beat on revenue and still fell, because markets look ahead.
- Communities are an asset. Watch which platforms turn loyal users into logged-in users without losing them.
Not financial advice.
Sources
How we checked
Every claim above is backed by at least two of the sources listed, using the original report or the company's own statement where there is one. If we could only find something in one place, it didn't make the cut.
This is news and information only, not financial, legal or security advice. Read our disclosures.
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