Reddit Shares Tumble Despite Strong Earnings as Google AI Overviews Cut Search Traffic
Updated
Updated · New York Magazine · Aug 8
Reddit Shares Tumble Despite Strong Earnings as Google AI Overviews Cut Search Traffic
3 articles · Updated · New York Magazine · Aug 8
Summary
Reddit’s stock fell after the company said search referrals were choppy and traffic grew more volatile late in the quarter, even though revenue rose and profitability hit a record.
Google’s AI Overviews are increasingly answering queries with summaries that cite Reddit posts but give users less reason to click through, undermining a traffic stream that had fueled Reddit’s 2024 and 2025 growth.
CEO Steve Huffman told investors Reddit is not building for “drive-by traffic,” but the company has already acknowledged that heavy dependence on Google referrals would not last forever.
Semrush data cited in the report showed Reddit was the most-cited domain in May by ChatGPT, Perplexity, Gemini and Google AI Mode, highlighting how AI firms extract value from Reddit even as direct audience gains weaken.
That tension is pushing Reddit and other publishers to reconsider ties with Google, with Reddit potentially seeking more than the eight-figure payments it already receives for access and data.