Key facts
- Reddit shares fell 23% and Pinterest shares fell 8% in premarket trading.
- Reddit warned Google's AI search features could reduce its user base.
- Pinterest forecast fourth-quarter revenue below Wall Street estimates.
- Reddit expects a double-digit percentage fall in daily active visitors.
- Pinterest's third-quarter revenue of $1.17 billion missed estimates.
Reddit shares tumbled 23% and Pinterest slumped 8% in premarket trading on Friday after Reddit warned that Google's AI search features could shrink its user base, and Pinterest forecast weak fourth-quarter revenue. Reddit expects a double-digit percentage fall in daily active visitors if referral traffic continues to decline, with JPMorgan analysts attributing the drop to Google's AI Overviews and AI Mode. Pinterest's third-quarter revenue of $1.17 billion missed estimates, and its fourth-quarter forecast also fell short of Wall Street expectations, partly due to the EU's de minimis exemption impacting cross-border sellers. Reddit has committed to spending $880 million with Amazon Web Services and $580 million with Google through 2029 for cloud services.