Google traffic wobble sends major signal for sinking Reddit stock

That disconnect tells you thing important astir however investors are reasoning astir Reddit (RDDT) close now, and it has astir thing to bash with the numbers everyone expected to matter.

Reddit's net bushed the numbers but missed the mood

In Q2 of 2026:

• Reddit reported gross of $805 million, up 61% from a twelvemonth earlier.

• Net income came successful astatine $253 million, oregon $1.25 per diluted share, compared with $89 cardinal a twelvemonth ago. 

• Earnings per stock of $1.25 sailed past the $0.95 analysts had penciled in, and gross cleared the $730 cardinal estimation with country to spare, according to CNBC. 

Guidance looked adjacent stronger.

Reddit told investors it expects third-quarter gross betwixt $860 cardinal and $870 million, supra the $854 cardinal consensus, on with adjusted net of $385 cardinal to $395 million. 

By astir immoderate measure, that is simply a beardown report. Yet Reddit shares are down 23% astatine the clip of writing,  aft the institution flagged 1 operation successful its capitalist letter: hunt referrals were choppy.

That azygous line, much than the net bushed itself, is what moved the stock.

Google hunt referral postulation declines successful Q2

Reddit has spent years gathering a concern that leans heavy connected radical arriving done Google search. 

When idiosyncratic types a question successful Google, and a Reddit thread shows up successful the results, that click often turns into a caller Reddit user. 

As Google leans harder into AI-generated answers alternatively of the accepted database of links, less of those clicks marque it done to Reddit. 

More AI:

• Workers conscionable sent AI companies an ultimatum

• Palantir CEO has a blunt verdict connected OpenAI and Anthropic

• Elon Musk pulls nary punches with AI rivals arsenic Grok 4.5 debuts

CEO Steve Huffman addressed the contented straight connected the net call, stating:

"Search referrals were choppy successful the quarter, and postulation was much volatile aboriginal successful the quarter. But the bigger representation is unchanged. The commercialized concern is strong, our gross maturation is differentiated, and we person overmuch to beryllium encouraged by connected the merchandise side."

Investors person watched this interest play retired before. Earlier this year, Reddit shares tumbled aft reports that the institution was weighing whether to chopped disconnected Google's entree to its information entirely.  

Reddit has raised concerns that referral postulation keeps shrinking arsenic Google pushes its ain AI chat tools alternatively of sending users elsewhere.