US Stock Market Move | Reddit (RDDT.US) plunges nearly 22% as CEO warns of AI reshaping search traffic direction.

On Friday, Reddit (RDDT.US) opened lower with a gap down, and the decline continued to widen, reaching nearly 22% as of the time of this report. In terms of news, Reddit recently released its Q2 2026 financial report, achieving revenue of $805 million, a year-on-year increase of 61%; net profit attributable to the parent company was $253 million, a year-on-year increase of 183%, showcasing strong overall financial performance. However, CEO Steve Hoffman issued a warning about the current fluctuations in search traffic. He pointed out that there has been significant volatility in visits from search engines lately, primarily due to the accelerated application of artificial intelligence in the search domain. Hoffman specifically mentioned the considerable impact of the AI overview feature launched by Alphabet Inc. Class C on the industry landscape. The AI overview system aggregates and presents information directly on the search results page, eliminating the need for users to click through to the original content platform. This change has led to a noticeable decrease in direct traffic for content platforms like Reddit. For a platform that has always heavily relied on search engine traffic and needs active users to generate advertising revenue, this is undoubtedly a warning signal.