Reddit stock drops 9% amid talks to end Google AI data deal
Reddit shares fell 9% on July 22, 2026, following reports that the company may not renew its $60 million-per-year data-licensing deal with Google for AI training. Reddit executives are concerned that Google’s AI Overviews reduce referral traffic, hurting ad revenue. Negotiations have stalled over usage-based fees. Reddit also licenses data to OpenAI, giving it leverage. Other major publishers like USA Today, Politico, and Reuters are similarly reassessing Google relationships. Reddit’s Q1 revenue surged 69% to $663 million, but the stock is down 27% year-to-date.
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Reddit Stock Collapses 23% as AI Eats Away at User Growth
Reddit's stock plunged 23% following its Q2 2026 earnings release, despite beating revenue and earnings expectations. Revenue surged 72% year-over-year to $500 million, but user growth metrics revealed underlying weakness. Global daily active users grew only 18%, with US user growth slowing to 6% from 16% a year ago. Most concerning, logged-in user growth remained stagnant at 1% for the second consecutive quarter, down from 12% previously. The article attributes the slowdown to AI-powered search summaries, particularly from Reddit's partnership with Google, which answer user questions without driving traffic to Reddit. This reduces opportunities to convert casual visitors into engaged, logged-in users who generate higher advertising revenue. Reddit management plans to stop reporting logged-in versus logged-out user metrics, reducing transparency. The company is reportedly rethinking its Google partnership as the trade-off between licensing revenue and user engagement becomes apparent.
Alphabet Jumps 6%, Reddit Craters 23% in Social Media Stock Divergence
Social media stocks diverged sharply on July 31, 2026, with Reddit (RDDT) plunging 23% to $136.32 despite beating Q2 earnings estimates, while Alphabet (GOOGL) rose 6% to $352.45. Reddit reported Q2 revenue of $805 million (up 61% YoY) and EPS of $1.25, both above consensus, and raised Q3 guidance. However, CEO Steve Huffman's warning that Google search referrals turned 'choppy' and traffic became 'more volatile' late in the quarter triggered the sell-off. U.S. daily active users slipped sequentially to 53.2 million. The irony highlighted is that Google simultaneously drives Reddit's traffic, licenses its data for AI, and builds AI summaries that squeeze Reddit's referral funnel. Meta Platforms remained flat, Snap fell 2%, and Reddit stock is now down 40% year-to-date.
Reddit stock tumbles most on record as lack of new AI deals and US daily users metric disappoints
Reddit (RDDT) stock plunged nearly 21% on July 31, 2026, its largest intraday decline since going public, after the company's earnings report failed to announce new artificial intelligence data licensing agreements, disappointing investors. While revenue of $804.9 million beat estimates of $731.8 million, US daily active users came in at 53.2 million, just shy of the 54 million expected. Total daily active users grew 18% to 130.3 million, slightly above estimates. CEO Steve Huffman noted that AI deals 'have to make sense for Reddit' and highlighted 'headwinds' in search referrals as AI changes content discovery. Reddit has existing AI deals with OpenAI and Google, but the lack of new partnerships and user metric miss drove the record sell-off.
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Reddit Reports Strong Q2 Earnings but Stock Falls on AI-Driven Search Traffic Concerns
Reddit reported strong second-quarter 2026 earnings, with revenue of $805 million (up 61% year-over-year) and net income of $253 million (up 183%), beating Wall Street expectations. The company also issued better-than-expected Q3 guidance. However, shares fell over 10% in after-hours trading after CEO Steve Huffman warned in a shareholder letter that search referrals had become 'choppy' and traffic more volatile later in the quarter. Investors fear that Google's AI-generated summaries are reducing organic traffic to Reddit, particularly among logged-out users. US daily active uniques declined slightly to 53.2 million from 53.5 million in Q1. During the earnings call, analysts pressed Huffman on whether Reddit would continue licensing data to Google and OpenAI. Huffman emphasized Reddit's unique human community value but was vague about future data licensing deals, stating the company would 'maximize value for Reddit.'
RDDT Stock Sinks on Reports of Reddit-Alphabet AI Feud
Reddit (RDDT) shares fell sharply on July 22, 2026, following reports of a growing dispute with Alphabet's Google over their AI data licensing agreement. According to the Wall Street Journal, Reddit is considering restricting Google's access to its platform for AI training or demanding significantly higher fees to renew the deal. The conflict stems from Reddit's frustration that Google uses its forum data to create AI-driven search overviews, monetizing Reddit's intellectual property while reducing referral web traffic that drives Reddit's advertising revenue. This creates a strategic dilemma: cutting off Google could hurt Reddit's licensing revenue and search rankings, while renewing on current terms allows Google to absorb user traffic. The news comes just before Reddit's Q2 earnings report, where analysts expect strong profit growth. Despite the friction, Wall Street maintains a 'Moderate Buy' rating on RDDT with a mean price target of nearly $224.
Reddit stock drops 9% as Google AI content deal nears expiration
Reddit's stock fell 9% on Wednesday after the Wall Street Journal reported that the company has internally discussed ending Google's ability to access its content for AI training. The $60 million-a-year deal between Reddit and Google, struck in 2024, is nearing expiration, and renewal talks are underway. Reddit's leadership is questioning whether the arrangement still benefits the company as Google's AI-powered query responses reduce traffic to third-party sites. Other major publishers including USA Today, Politico, and Reuters are also reconsidering their partnerships with Google. USA Today saw a nearly 50% decline in Google search traffic over the past year. Reddit also has a data licensing partnership with OpenAI. The company reported Q1 revenue of $663 million, with data licensing contributing $39 million. Reddit's share price has fallen approximately 27% since the start of the year.
Reddit stock drops 9% as Google AI content deal nears expiration
Reddit's stock fell 9% on July 22, 2026, following a Wall Street Journal report that the company has internally discussed ending Google's access to its content for AI training. Reddit and Google signed a $60 million-per-year deal in 2024 that is now expiring, with renewal talks underway. Reddit leadership is questioning whether the deal still benefits the company as Google's AI-powered search responses reduce traffic to third-party sites. The article notes that other major publishers including USA Today, Politico, and Reuters are also reconsidering their relationships with Google. USA Today's Google search traffic dropped nearly 50% over the past year. Reddit also has a data licensing partnership with OpenAI. Reddit reported Q1 2026 revenue of $663 million, with data licensing contributing $39 million. The stock has fallen approximately 27% since the start of the year.
Reddit Sinks 9% on Reports It May Cut Off Google's AI Data Access
Reddit shares fell 9% to $169.48 following a Wall Street Journal report that the company may block Alphabet's Google from using its content to train AI models. The two sides are negotiating a renewal of their 2024 data-licensing agreement, estimated at $60 million per year, but talks have stalled over traffic cannibalization concerns. Google's AI Overviews answer queries directly on search pages, reducing referral clicks that Reddit relies on for ad revenue. Reddit executives reportedly want usage-based fees in the next deal. The stock is down 26% year to date, though Q1 revenue surged 69% and analysts have a $227 price target. Reddit also licenses data to OpenAI, giving it pricing leverage. Other publishers including USA Today, Politico, and Reuters are also reassessing their Google relationships. Alphabet shares were little changed, while Meta and Snap saw muted reactions.
Reddit Sinks 9% on Reports It May Cut Off Google’s AI Data Access
Reddit shares fell 9% to $169.48 following a Wall Street Journal report that the company may block Google from using its content to train AI models. The two sides are negotiating a renewal of their 2024 data-licensing agreement, estimated at $60 million per year, but talks have stalled over traffic cannibalization concerns. Google's AI Overviews answer queries directly on search pages, reducing referral clicks that Reddit relies on for ad revenue. Reddit executives reportedly want usage-based fees. The stock is down 26% year-to-date, though Q1 revenue surged 69%. Analysts maintain a $227 price target. Other publishers like USA Today and Reuters are also reassessing Google relationships. Alphabet shares were little changed. Insider COO Jennifer Wong sold stock under a pre-arranged plan.
Reddit stock sinks on report it may not renew Google AI content deal
Shares of Reddit fell 9% on Wednesday after the Wall Street Journal reported that Reddit has discussed ending Google's access to its content for AI training. The two companies struck a deal in 2024 allowing Google to train AI models on Reddit data, but as Google's AI summaries reduce traffic to websites, Reddit is reconsidering the benefits. The $60 million-a-year deal is ending soon, and negotiations are ongoing. Similar traffic declines have hit other publishers: Politico down 23%, CNN down 25%, and Business Insider down over 85% between June 2025 and 2026. Reddit also has a partnership with OpenAI. Despite the news, Reddit's Q1 earnings beat expectations with revenue up 69% year-over-year. The company reports Q2 earnings on July 30.