Reddit Shares Fall About 30% After CEO Says Google AI Overviews Are 'Not Traffic Drivers'

Reddit's stock fell about 30% after the company's third-quarter report, according to the Economic Times. The drop followed Thursday's earnings call, where CEO Steve Huffman said Google's AI Overviews "are not traffic drivers" and that "Google has really shifted in their relationship with the rest of the internet."

The numbers behind that statement come from Huffman's letter to shareholders. Search traffic was "down meaningfully in Q3." In October, referrals fell by more than 1 million per week on average.

If that trend holds, Huffman wrote, Reddit could lose "a low-double-digit percentage from our current base of 130 million" daily active unique visits.

The business is still growing

The quarter itself was not weak. Reddit reported $895 million in revenue, up 53% from a year earlier.

The worry is where future growth comes from. Huffman said 80% of Reddit's monetization comes from app users and logged-in users. Those users can be targeted more precisely, which is what advertisers pay for.

That is the logic behind the company's move toward a mostly logged-in-only experience, with tests planned outside the U.S. this quarter. Anonymous visitors who arrive from a search result are the ones most exposed to the traffic decline, and they are also the ones Reddit earns least from.

From traffic boom to traffic worry

Two years ago the story ran the other way. Similarweb data showed Reddit's traffic up 39% from May 2023 to May 2024, driven largely by Google search. Reddit was heading toward its public listing and had just signed a deal licensing its posts to Google for AI training.

That licensing deal has not insulated it. Huffman is describing a company that sold content to Google and is now losing the referral traffic that content used to generate. Reddit has not said whether it has raised the matter with Google, and Google has not responded in the material we have.

Citation share is not the same as clicks

Outside data on how often AI products cite Reddit is mixed, and it measures something different from referral traffic.

Dageno, an AI search intelligence firm, tracked answers across eight AI platforms from February through September 2026. In September, the share of monitored, source-linked answers containing at least one Reddit URL was:

• Google AI Overviews: 38.6%
• Google AI Mode: 27.7%
• Perplexity: 8.5%
• Gemini: 5.6%
• Grok: 1.7%
• ChatGPT: 1.4%

Dageno says these figures cover only the answers it monitors, not all user activity. Its data shows ChatGPT falling from 34.8% in February to about 1.4% in September, and Grok from 79.5% to 1.7%.

So on Dageno's numbers, Google's AI products still cite Reddit often. Huffman's complaint is that being cited in an AI answer does not send people to Reddit. He did not frame it as a citation problem.

A separate analysis by Promptwatch found Reddit's average share of ChatGPT Search citations fell from 3.83% (July 18 to August 7) to 0.52% (August 14 to 17), an 86% drop. Promptwatch has said its data shows when the shift happened, not why, and it has not ruled out a data-collection problem. Over the same period, Reddit's share in Google's AI Overviews slipped only from about 2.5% to 2.1% in that analysis.

The methods and baselines differ across these studies, so the figures should not be stacked together. They do point the same direction on volatility: citations from AI products can move sharply with no warning to the publisher.

What Reddit's position says

Huffman's view is that Google has changed the deal with the open web. In his telling, AI summaries answer the question on the results page and the click never happens. Other publishers have talked about bracing for "Google Zero," a scenario in which Google referral traffic bottoms out.

Reddit's own pivot is a hedge against that scenario. If anonymous search visitors keep declining, the company wants more of its audience logged in, in the app, and visible to advertisers.

The risk is clear. Walling off content that Google and others can currently index could reduce discovery further. Reddit has not set a global date for the logged-in-only shift, and the first tests outside the U.S. are due before the end of the year.

It is unclear whether the October decline continues. Huffman's own range, a low-double-digit percentage of 130 million daily unique visits, is the number investors will be watching when Reddit reports its next quarter.