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Reddit Misses Daily Visitor Estimates Due to Google Algorithm Change, Shares Drop

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Reddit (RDDT.N) fell short of market expectations for daily active unique visitors in the fourth quarter, impacted by a change in Google’s search algorithm that reduced its visibility in search results. This announcement sent Reddit’s shares tumbling 15% in after-hours trading on Wednesday.

The San Francisco-based company, which launched its IPO in March 2024, saw its stock surge nearly five-fold last year. However, volatility with Google search at the end of the fourth quarter affected traffic from “logged-out users”—those who browse without signing in, CEO Steve Huffman said in a letter to shareholders. Despite the setback, Huffman noted that traffic from Google search has since recovered in the first quarter of 2025.

Reddit’s daily active unique visitors grew by 39% to 101.7 million for the quarter ending December 31, but this fell short of analysts’ average estimate of 103.3 million, according to LSEG data. Growth has also slowed sequentially.

“Reddit shares are down due to missed expectations on daily active users, but it’s not a reason to lose faith in the company,” said Jeremy Goldman, senior director of briefings at eMarketer. He added that Reddit’s international expansion and AI advancements could help it become a digital advertising powerhouse.

Reddit has been leveraging AI deals with Alphabet’s Google and Microsoft-backed OpenAI, as well as conversation placement ads—where brands can advertise directly within subreddit discussions. These factors have helped Reddit forecast first-quarter revenue between $360 million and $370 million, surpassing analysts’ average estimate of $358.1 million.

The company reported fourth-quarter revenue of $427.7 million, beating the $405.3 million estimate, largely driven by holiday season ad spending. Profit per share came in at 36 cents, surpassing the 25-cent estimate. Reddit’s global average revenue per user increased by 23% to $4.21.

Additionally, Huffman mentioned ongoing discussions for data licensing deals with major industry players.

Google has yet to respond to inquiries about its algorithm changes.

Brazil Denies Report of Tax on US Tech Firms Amid Trump Steel Tariffs

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Brazil’s Finance Minister, Fernando Haddad, denied reports on Monday suggesting that the country was considering imposing taxes on U.S. tech companies in response to President Donald Trump’s proposed 25% tariff on all U.S. steel imports.

The speculation arose after a report from the Brazilian newspaper Folha de S.Paulo, which claimed that the administration of President Luiz Inácio Lula da Silva was contemplating levying tariffs on major tech firms as a retaliatory measure.

Haddad quickly refuted the claims on social media, emphasizing that the information was inaccurate. He reiterated that the Brazilian government would only make official statements based on concrete decisions, not speculative announcements that could be misinterpreted or later changed.

The report had suggested that tech giants such as Amazon (AMZN.O), Meta Platforms (META.O), and Alphabet (GOOGL.O) could be targeted by such a tax. However, Haddad’s remarks clarified that no such plans were under consideration at this time.

Brazil, a significant supplier of U.S. steel imports, also serves as a key market for many large tech companies, which would have been affected by such a tax. The denial comes as Trump is set to introduce additional tariffs on steel and aluminum imports, escalating his trade policy strategy.

Amazon Shares Drop as Cloud Growth Misses Expectations

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Amazon’s stock fell by 4% on Friday after the company’s quarterly cloud computing revenue growth fell short of investor expectations. The disappointing results reflected a slowdown in growth at Amazon Web Services (AWS), which posted a 19% increase in revenue to $28.79 billion. This figure was slightly below the anticipated $28.87 billion. The performance echoed similar disappointments from other major tech giants, including Microsoft and Alphabet, who also saw cloud revenue growth fail to meet expectations.

The missed expectations came as cloud companies, particularly those heavily investing in AI, are under greater scrutiny. AWS’s growth rate matched that of the previous quarter, raising concerns among analysts about potential capacity constraints or other unidentified issues.

The disappointing results led to a $100 billion drop in Amazon’s market value. However, Amazon’s stock has still risen about 4% in 2025, outpacing losses seen by Microsoft and Alphabet, whose stocks have fallen by 3%. Despite this drop, Amazon’s shares continue to be favored by analysts, with 68 recommending buying the stock and no analysts advising to sell.