Reddit (RDDT) stock is down again on Wednesday as analysts continue to update their coverage of the social media company’s shares in light of Alphabet’s (GOOGL) new AI Mode for Google Search. This mode expands the capabilities of Google’s AI search function, providing deeper insights into users’ questions.
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That’s bad news for Reddit as the company gets a large portion of its traffic from users who search topics on Google to find answers, leading them to Reddit threads. With AI now providing those answers directly, Reddit risks losing out on ad revenue from lost traffic. It could also lead to fewer account creations on the website and a drop in monthly active users.
Recent RDDT Stock Analyst Coverage
Concerns about the effects of Google Search AI Mode led some analysts to revise their coverage of RDDT stock.
- Five-star Wells Fargo analyst Ken Gawrelski downgraded the shares to Hold and cut his price target from $168 to $115.
- Five-star Raymond James analyst Josh Beck downgraded the social media company’s shares to Hold.
- Five-star Robert W. Baird analyst Colin Sebastian maintained a Hold rating and lowered his price target from $140 to $120.
The negative analyst coverage and Google Search AI Mode concerns brought with them drops for RDDT stock. This has shares down 3.86% on Wednesday morning, following a 2.18% drop on Tuesday. The company’s stock is also down 37.8% year-to-date, but remains up 86.35% over the past 52 weeks.
Is RDDT Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Reddit is Moderate Buy, based on 12 Buy, eight Hold, and one Sell ratings over the past three months. With that comes an average RDDT stock price target of $150.35, representing a potential 47.59% upside for the shares.
