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October 01, 2025
Reddit Stock Falls: Reddit (RDDT) stock tumbled nearly 8% in early trading on Wednesday. The drop added to a 5% loss from the previous day.
Investors reacted to new data showing Reddit’s presence in ChatGPT answers has plunged. On Tuesday, Reddit content showed up in only 2% of ChatGPT responses.
A month earlier, that figure was 9.7%. At one point in September, Reddit appeared in more than 14% of answers, according to tracking firm Promptwatch.
Despite the decline, Reddit held its spot as the most cited social platform on ChatGPT. In September, its content showed up in about 4.3% of responses on average.
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By comparison, LinkedIn was mentioned in only 0.4% of answers. Users often rely on Reddit as a search tool, adding the word “reddit” to queries when they want real advice or practical tips.
Google (GOOG, GOOGL) still dominates traditional search. But the arrival of AI chatbots, beginning with ChatGPT’s launch in late 2022, has created a new threat to Reddit and other platforms that thrive on search traffic.
Reddit has tackled the threat of being sidelined by signing multi-billion-dollar data deals. OpenAI, the creator of ChatGPT, and Google now pay to use Reddit content in their AI models.
The company has also introduced its own AI search and advertising tools. In mid-September, Bloomberg reported that Reddit was negotiating a new licensing agreement with Google, part of Alphabet.
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The discussions were expected to include dynamic pricing, allowing Reddit to earn more when its content appears frequently in AI responses.
According to unnamed executives cited by Bloomberg, the news boosted Reddit shares in mid-September.
Investors have been keeping a close eye on Reddit’s web traffic. Daily user activity on the platform can fluctuate whenever Google Search updates its algorithm.
Following the quarterly reports in February and May, Reddit’s stock slipped. Market watchers were worried that these algorithm changes could cause unstable traffic patterns.
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Advertising remains Reddit’s main source of revenue. In its second quarter, ad income jumped almost 84%, reaching $465 million.
This represented 93% of the company’s total revenue for the three months ending June 30. The period marked Reddit’s fastest revenue growth in three years.
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