Why Reddit Inc. (RDDT) Went Down On Wednesday

We recently published a list of These 10 Firms Were Battered by Dismal Earnings, Outlook Guidance. In this article, we are going to take a look at where Reddit Inc. (NYSE:RDDT) stands against other worst-performing stocks on Wednesday.

A lackluster trading persisted on the stock market anew on Wednesday, with the three major indices finishing mixed, as investors digested news of the US economy’s contraction in the first quarter of the year, triggering fears of recession.

Among all major indices, only the Dow Jones and S&P 500 ended in the green, up 0.35 percent and 0.15 percent, respectively. In contrast, the tech-heavy Nasdaq dipped by 0.09 percent.

Ten companies also mirrored the wider market downturn, predominantly due to dismal earnings performance and tempered growth outlook for the remainder of the year.

In this article, we have named 10 of the worst-performing stocks on Wednesday and detailed the reasons behind their drop.

To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5-million trading volume.

Reddit Inc. (NYSE:RDDT)

Reddit snapped a six-day winning streak on Wednesday, losing 4.56 percent to close at $116.57 apiece as investors resorted to profit-taking while digesting an investment firm’s price target downgrade on its stock.

On Tuesday, analysts from Bernstein lowered their price target for Reddit Inc. (NYSE:RDDT) by 27 percent to $110 from $150 previously and maintained their underperform rating on the shares.

According to the analysts, the adjustment was based on concerns about the declining app downloads during the first quarter of the year, albeit the figure saw a pickup in April.

Additionally, the traffic originating from Google has tapered off year-to-date, including after another algorithm update from the search engine giant towards the end of April.

Apart from Bernstein, Reddit Inc. (NYSE:RDDT) also earned a lower price target from Deutsche Bank, at $180 versus $235 previously.

Reddit Inc. (NYSE:RDDT) is set to announce the results of its first quarter earnings performance on Thursday, May 1, 2025.

Overall, RDDT ranks 10th on our list of worst-performing stocks on Wednesday. While we acknowledge the potential of RDDT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than RDDT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.