Reddit Stock Falls About 23%: Weak Forecast, Google AI Traffic Hit and a Login Test

Reddit beat its third-quarter 2026 targets, with revenue up 53%. But its holiday-quarter forecast came in below expectations, U.S. daily users fell, and CEO Steve Huffman said Google's AI search features are sending Reddit less traffic. Reddit also plans to test requiring users to log in. The stock fell about 21% to 23% before Friday's open.

This is news, not financial advice. Do your own research before buying or selling any stock.

Reddit's numbers

• Revenue: $895 million, up 53% from a year ago, above the roughly $875 million analysts expected.
• Earnings per share: $1.40, above the $1.36 consensus.
• Adjusted EBITDA: $402 million, up 70%, a 45% margin.
• Daily active users: 130.3 million, up 12%, but below the roughly 133.7 million Wall Street expected.
• U.S. users: 50.7 million daily active users, down 2% from a year earlier. International users grew 28% to 77.1 million.

Why the stock fell

• Weaker forecast: Reddit expects fourth-quarter revenue of $1.00 billion to $1.03 billion, below the roughly $1.05 billion analysts expected. It guided adjusted EBITDA to $480 million to $510 million.
• Google traffic: Huffman said traffic from search went "down meaningfully in this quarter" because of Google's "shift to AI mode and AI overviews", which answer questions directly instead of sending people to Reddit threads.
• Analyst downgrades: Citizens cut the stock to Market Perform, and KeyBanc also lowered its rating, saying search traffic is a bigger problem than it expected.

The stock closed Thursday at $129.60, fell about 18% after hours, and was down about 21% to 23% in Friday's pre-market, depending on the source and time. Pre-market moves can change once regular trading starts.

The login test

Reddit says it will start testing a login requirement in the fourth quarter, outside the U.S. The idea is to turn more casual visitors, many of whom arrive from Google, into logged-in users. Reddit hasn't said yet which content would stay visible without an account.

A busy day for tech stocks

Reddit wasn't alone. Intel was down about 25% pre-market on a weak forecast, and Amazon also fell, while oil giants Exxon and Chevron beat on a refining boom.

My take

53% revenue growth is a great quarter by any normal standard. The worry is the source of new visitors: if more people get their answers from Google's AI instead of clicking through to Reddit threads, growth gets harder, especially in the U.S. A login wall could help Reddit keep the users it has, but it could also push casual visitors away. Would you make an account if Reddit forced you to log in?

This is news, not financial advice.