The future of Reddit is under intense scrutiny after a leading Wells Fargo analyst declared that Google’s new AI-powered search features could mark the “beginning of the end” for the social media platform’s growth trajectory. The stark warning comes as Reddit’s stock faces mounting pressure, with shares dropping nearly 5% this week following a high-profile downgrade from ‘overweight’ to ‘equal weight’ and a sharp reduction in price target.
Wells Fargo’s analysis centers on the seismic shift underway in how users discover and consume information online. With Google rolling out comprehensive AI search capabilities, platforms like Reddit—long reliant on search-driven traffic from non-logged-in users—are facing a fundamental threat to their business models.
The analyst highlighted that recent disruptions in Reddit’s user growth, particularly among visitors who arrive via Google searches, are likely to be enduring as AI-generated answers increasingly satisfy user queries directly on Google, bypassing external sites.
Reddit’s leadership has acknowledged the challenge. In its latest earnings call, CEO Steve Huffman warned of “bumps along the way from Google,” noting that changes to the search landscape are already impacting the company’s ability to attract new users.
While Reddit’s core community of registered users remains engaged, the loss of organic search traffic is eroding the platform’s reach and, crucially, its advertising revenue. More than half of Reddit’s audience has historically consisted of logged-out visitors—users who generate valuable ad impressions but may not convert to long-term community members.
The financial implications are significant. As Google’s AI search tools become more prevalent, the volume of external traffic to Reddit is expected to decline further, putting additional strain on the company’s ambitious revenue growth targets. Despite efforts to bolster direct engagement through features like AI-powered Reddit Answers, analysts remain cautious about Reddit’s prospects in the evolving digital ecosystem.
This development is part of a broader trend reshaping the internet. Google’s push toward AI-driven search is not only challenging traditional search behaviors but also forcing content platforms to adapt or risk obsolescence. The rise of AI-generated responses and the emphasis on expertise, authoritativeness, and trustworthiness in search results are fundamentally altering the visibility and viability of user-generated content sites.
As competition intensifies and Google’s AI ambitions accelerate, the outlook for Reddit and similar platforms remains uncertain. For now, investors and industry observers are watching closely to see whether Reddit can innovate fast enough to withstand the disruptive force of AI-powered search.
