Reddit Stock Plunges as Lack of New AI Deals and Missed User Metrics Disappoint Investors
Reddit's (RDDT) stock fell nearly 21% on July 31, marking its largest intraday decline since going public. The drop came after the company reported no new artificial intelligence data licensing agreements in its latest earnings report, which disappointed investors expecting more revenue opportunities from AI partnerships despite beating revenue estimates. The user discussion platform also missed expectations for US daily active users (53.2 million vs. 54 million expected), although total daily active users grew to 130.3 million—slightly above forecasts. Reddit's CEO, Steve Huffman, noted ongoing headwinds in search referrals due to AI-driven changes in how content is discovered online. Wall Street has been increasingly focused on the potential of data licensing deals as a revenue stream for Reddit, given its vast collection of user-generated discussions valuable for training AI models.
Topics: AI data licensing deals RDDT stock price decline Reddit user metrics