Reddit grew revenue 61% and nearly tripled profit. The stock fell 20%+ today because of four words: "search referrals were choppy"
u/valbolt ·
Reddit — r/stocks
· July 31, 2026 at 19:17
· ⬆ 248 pts
· 💬 121 comments
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AI Summary
Summary
Post analyzes Reddit’s (RDDT) post-earnings 20%+ crash despite 61% revenue growth and nearly tripled profit.
Author believes the sell-off is an overreaction to one phrase — “search referrals were choppy” — and rejects the fear that Google AI summaries destroy Reddit’s growth.
Quality assessment: This is opinion/event-driven speculation rather than deep financial modeling, but it includes relevant earnings data and a clear contrarian thesis.
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Reddit just had maybe the best quarter of any social platform this year... revenue up 61%, profit almost tripled, users up 18%.
Stock dropped 20% anyway (it was down 23% at the lows, per CNBC).
Why? Four words buried in the investor letter: "search referrals were choppy."
That's it. That's the crash.
Basically most new people find Reddit by googling stuff. And Google's AI now just answers the question right there on the results page, so nobody clicks through.... so Wall Street ignored the great numbers and focused on one fear: if Google stops sending people, where does Reddit's growth come from?
And here's the part that actually breaks my brain: Reddit sells its content to Google to train that same AI... Google pays Reddit for the data, then uses it to answer questions so people don't visit Reddit.
The CEO got on the call and said people don't want AI summaries they want Reddit. The market listened to that argument and took the stock down 20%.
source:
[https://www.cnbc.com/2026/07/31/stocks-making-the-biggest-moves-midday-aapl-amzn-rddt-gddy-iesc.html](https://www.cnbc.com/2026/07/31/stocks-making-the-biggest-moves-midday-aapl-amzn-rddt-gddy-iesc.html)
Revenue grew 61%, profit nearly tripled, and users grew 18% in the same quarter — fundamentals remain very strong. The market focused on “search referrals were choppy” and sold off 20%, creating a potential dislocation between price and underlying business momentum. The author views the crash as an overreaction to a Google-driven traffic worry, making the stock an attractive buy at a lower forward valuation. US DAU weakness, Google AI permanently reducing Reddit’s search traffic, advertiser spend pullback, and lack of real AI/licensing upside beyond ads.