On May 21, 2025, Baird, a Wall Street analyst, lowered its price target for Reddit’s stock, citing concerns that Google’s increased integration of AI in its search results is hindering Reddit’s user growth.
Following this announcement, Reddit’s stock experienced a decline, dropping $9.79 per share, equivalent to a 9.27% decrease, closing at $95.85 per share on the same day.
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Why is Reddit Under Investigation?
Reddit is the owner and operator of its namesake social news aggregation platform, forum, and social media site. A large part of Reddit’s user traffic comes from individuals who look for answers via Google Search. During the pertinent timeframe, Reddit reassured investors that the implementation of Artificial Intelligence (“AI”) in Google’s search results had no significant effect on its user growth.
In reality, Google’s AI technology has hindered Reddit’s user growth by reducing the necessity for users to visit Reddit for answers. Instead, responses are now delivered directly through Google’s AI-powered search results.
Stock Prices Drop as Facts Come to Light
On May 21, 2025, Baird, a Wall Street analyst, lowered its stock price target for Reddit due to worries that Google’s AI advancements are hindering Reddit’s user growth. Following this announcement, Reddit’s stock price plummeted by $9.79 per share, a decline of more than 9%, dropping from $105.64 on May 20, 2025, to $95.85 on May 21, 2025.
For further details, click here: https://www.bfalaw.com/cases-investigations/reddit-inc-securities-fraud-class-action.
What Are Your Options?
If you have invested in Reddit, there may be legal avenues available to you, and you are encouraged to provide your information to the firm.
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