Reddit Shares Drop Despite Strong Earnings Due to Search Traffic Concerns
Reddit Inc (NYSE:RDDT) shares fell approximately 21% on July 31, 2026, after management raised concerns about volatility in search traffic and potential competition from AI-powered tools. This occurred despite the company reporting strong second-quarter results that exceeded Wall Street expectations. The social media platform reported Q2 revenue of $805 million—up 61% year-over-year—and earnings per share (EPS) of $1.25, surpassing estimates of $730 million and $0.95 respectively. User growth remained robust globally with daily active uniques rising to 130.3 million (+18%) and weekly active users reaching 514.6 million (+24%). However, a slight decline in U.S. daily active users raised concerns about domestic user traction. Reddit's CEO highlighted the company’s momentum from human-generated content but warned of
Tickers: $RDDT
Topics: AI Competition Earnings Stock Price Movement Traffic Volatility