Reddit’s AI problem is no longer growth — it’s Google

Reddit’s AI problem is no longer growth — it’s Google
Reddit just posted the kind of quarter most internet companies would kill for. Revenue jumped, profit surged, and guidance beat expectations. Yet the stock still slid, because Wall Street heard something more ominous beneath the good news: Google’s AI search era may be rewiring the traffic machine Reddit depends on.

That is the real tension here. Reddit wants to sell itself as the web’s reservoir of authentic human conversation at the exact moment search engines are getting better at stripping that conversation down into neat, answer-box summaries.

The numbers were strong. Reddit reported $805 million in quarterly revenue, up 61% year over year, with net income rising 183% to $253 million, while also forecasting another solid quarter ahead. Under ordinary circumstances, that should have been enough. Instead, investors fixated on management’s warning that search traffic had turned unstable. In its shareholder messaging, Reddit said search referrals were “choppy” and traffic became “more volatile later in the quarter,” even as the company insisted “the commercial business is strong.”

Steve Huffman’s broader argument is both strategic and self-serving: AI summaries may help users get answers faster, but they do less for the wider web. He framed Reddit as “the antidote to an automated web,” arguing that “People don’t want a summary of Reddit; they want Reddit.” On the earnings call, he sharpened the point, saying traditional search’s “10 blue links” created “tremendous value and growth to the broader ecosystem,” while “AI Overviews has yet to make a similar level of positive impact.”

That complaint is not just philosophical. It goes straight to Reddit’s business model. If Google answers more questions itself, fewer users click through to Reddit, fewer casual visitors become regulars, and the platform’s leverage in its licensing relationship with Google gets more complicated. Reddit may be thriving financially for now. But the market is betting that in the AI web, strong earnings are not the same thing as secure distribution.

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