Reddit Crashes Nearly 30% in Its Worst Trading Day Ever. Is Google AI Killing Its Traffic?

Reddit $RDDT reportedly plunged nearly 30% in a single trading session, marking its largest one-day percentage decline on record.
The selloff follows growing concerns about the company's dependence on traffic from Google Search as AI-powered search experiences change how users discover online content.
Reddit's leadership has warned that Google's AI Mode is not generating meaningful referral traffic, raising questions about future user growth.
The company could face additional pressure if fewer search referrals translate into weaker engagement and advertising opportunities.
However, declining search traffic does not automatically mean Reddit's entire business is shrinking. Direct visits, app usage and advertising performance remain important factors.
The market's reaction suggests investors are reassessing how vulnerable internet platforms may be to AI-driven changes in search.