Why Reddit, Inc. (RDDT) Crashed Today

We recently published a list of 10 Firms Drenched in Red Today. In this article, we are going to take a look at where Reddit, Inc. (NYSE:RDDT) stands against other firms that are drenched in red today.

Ten companies pulled back on Wednesday, booking hefty losses during the trading session, with investor sentiment weighed down by a flurry of government policies and dismal earnings performance in the last quarter of the year.

Meanwhile, the Dow Jones fell by 1.91 percent, the S&P 500 declined by 1.61 percent, and the tech-heavy Nasdaq dropped 1.41 percent.

In this article, let us take a look at the 10 companies that led a poor performance during the day and explore 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 in trading volume.

Reddit, Inc. (NYSE:RDDT)

Reddit extended its losing streak for a fifth consecutive day on Wednesday, losing 9.27 percent to close at $95.85 apiece as investor sentiment was dampened by an investment firm’s downgraded rating on its stock.

Earlier this week, Wells Fargo lowered its stock rating for Reddit, Inc. (NYSE:RDDT) to “Equal Weight” from “Overweight” previously, as well as its price target to $115 from $168 prior.

The rating was based on the belief that Google’s move to fully integrate artificial intelligence into its search engine operations could dent Reddit, Inc. (NYSE:RDDT) and its customer count permanently.

It noted, however, that Google’s AI integration not only affects Reddit, Inc. (NYSE:RDDT) but also the other companies dependent on search traffic.

Wells Fargo also highlighted how Reddit’s stock is currently under pressure due to user disruption.

Overall, RDDT ranks 4th on our list of firms that are drenched in red today. 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.