Reddit, Inc.

Meta Platforms agreed to a proposed multistate teen-safety settlement worth up to $17 billion, ending a federal trial that began days ago in Oakland, and its stock rose 1% to $575.60 at midday Wednesday. The settlement resolves allegations that Facebook and Instagram were designed to encourage compulsive use among children and teens, with payments running in annual installments over 10 years and California potentially receiving $1.5 billion to $2.1 billion. Participating states receive 70% of the allocated payment, while the remaining 30%, or $5.3 billion, is released only if YouTube and TikTok implement the same age assurance measures and match that amount. The $17 billion deal is a fraction of the $1.4 trillion in damages Meta said four states could seek, and Meta had booked a $2.4 billion charge related to legal proceedings in Q2 2026. Meanwhile, Snap stock fell 9% to $5.42 after Pennsylvania Attorney General Dave Sunday sued Snapchat over compulsive-use design and risks to minors, and Reddit slid 3% to $156.78 in sympathy, while the Global X Social Media ETF declined 0.7% to $45.28.

Snap shares fell 3% to $5.24 Monday midday after a federal appeals court ruling stripped the company's Section 230 immunity, opening the door to more than 3,000 consolidated lawsuits. The Ninth Circuit's August 10 decision rejected the legal shield that has historically protected social media platforms from liability over user-generated content, and the ruling sent Snap stock down as much as 12% overnight to $4.74 before buyers stepped in. The lawsuits, brought by states, municipalities, school districts and families, allege Snapchat was deliberately designed to maximize engagement among minors. The legal overhang overshadowed Snap's Q2 2026 revenue beat of $1.6 billion, up 18.9% year over year, and adjusted EBITDA of $249.62 million versus $41.27 million a year earlier. Peers also fell, with Meta Platforms down 3% to $573.9, Reddit down 3% to $173.45, and Pinterest down 4% to $23.2, while the Global X Social Media ETF slipped 1% to $46.11.

Bragar Eagel & Squire, a nationally recognized shareholder rights law firm, is investigating potential claims against Reddit on behalf of long-term stockholders. The investigation follows a class action complaint filed against Reddit on June 18, 2025, with a Class Period from October 29, 2024 to May 20, 2025. The firm is examining whether Reddit's board of directors breached their fiduciary duties to the company. Long-term stockholders are encouraged to contact partners Brandon Walker or Melissa Fortunato at investigations@bespc.com or by telephone at 212-355-4648 to discuss their legal rights, with no cost or obligation.

Reddit shares have sold off sharply since its July 30 earnings report despite beating estimates, with retail traders on the platform itself split between value hunters and AI traffic skeptics. Reddit fell 13.7% over the past week and is down 32.7% year to date, though the stock rallied nearly 10% on August 3 to close at about $154.71. The selloff was triggered by CEO Steve Huffman noting that search referrals were choppy, overshadowing a quarter where EPS of $1.25 beat the $0.97 consensus, revenue of $804.9 million topped the $730.96 million estimate, and net income jumped 183%. Sentiment on Reddit swung from bullish to bearish, with r/wallstreetbets skewing bearish and r/investing leaning bullish, as value hunters point to eight consecutive quarters of 60%-plus revenue growth and a trailing PEG ratio of 0.1, while skeptics worry about Google search referral visibility and AI-driven traffic erosion. The next catalyst is the Google data licensing negotiation, which Huffman said has yet to find a win-win resolution.

Reddit shares dropped 23% after the company flagged choppy Google search referral traffic, overshadowing a strong second-quarter earnings report. Revenue rose 61% year over year to $805 million, net income more than doubled to $253 million, and earnings per share of $1.25 beat the $0.95 consensus estimate. Third-quarter revenue guidance of $860 million to $870 million also topped Wall Street's $854 million forecast. CEO Steve Huffman acknowledged volatile search referrals but emphasized that the commercial business remains strong and that Reddit is building for direct app engagement, where daily active unique users grew 18% to 130.3 million. The market focused on the risk that Google's AI-generated answers could reduce click-throughs to Reddit, even as the company reported its first trailing 12-month operating cash flow above $1 billion.

Several stocks made big midday moves following earnings reports and other developments. IES Holdings surged over 30% after beating quarterly expectations and approving a two-for-one stock split, while GoDaddy tumbled 20% on disappointing guidance and a cash flow miss. Newell Brands rose 11% after lifting its full-year earnings outlook above consensus, and SPX Technologies rallied 14% on strong results and raised guidance. Veracyte fell 24% despite beating estimates and raising revenue guidance, and Replimune Group soared over 94% after an FDA panel backed its skin cancer drug trial. Jersey Mike's gained 6% on its second day of trading after a weak debut. Chevron added 1.6% on better-than-expected earnings, while ExxonMobil slipped 2% on a profit miss. Moderna dipped 1% despite a top- and bottom-line beat. Amazon jumped 15% on strong revenue and cloud growth, but Apple dropped more than 9% even with higher iPhone sales. Coinbase slid over 12% after a wider-than-expected loss, Reddit sank 22% on search traffic concerns, and Novo Nordisk fell 9% after a drug trial failed to meet its main goal.

Reddit cratered 24% despite beating Q2 estimates with $805 million in revenue, while Alphabet gained 5% in the same session. Reddit CEO Steve Huffman warned that Google search referrals turned choppy, overshadowing a beat-and-raise quarter that included earnings per share of $1.25 and a raised third-quarter revenue outlook of $860 million to $870 million. The sell-off left Meta Platforms roughly flat and Snap down just 2%, highlighting a divergence between AI infrastructure winners and content platforms dependent on search traffic. Reddit also disclosed no new AI data-licensing deal, disappointing investors who had hoped for another agreement alongside existing pacts with OpenAI and Google.

Replimune Group shares surged more than 130% in premarket trading after a Food and Drug Administration advisory panel voted in favor of the company's RP1 drug trial results for a type of skin cancer, prompting Wedbush Securities to upgrade the stock to outperform from neutral. Chevron edged higher after reporting second-quarter net income of $12.1 billion, a nearly 400% increase from a year earlier, while ExxonMobil fell 2% on adjusted earnings of $3.52 per share that missed the $3.60 estimate. Amazon jumped over 11% after its cloud revenue grew 37% year over year, the fastest pace in 18 quarters, but Apple dropped more than 7% despite stronger-than-expected fiscal third-quarter revenue driven by a 22% rise in iPhone sales. Moderna lost over 4% even as its second-quarter loss of $1.97 per share on revenue of $145 million beat expectations, and Coinbase slid more than 5% after posting a third straight quarterly loss of $359.5 million, or $1.36 per share, far wider than the anticipated 17-cent loss. Reddit tumbled 12% as CEO Steve Huffman described search-referral traffic as choppy, overshadowing an earnings beat and guidance that sailed past estimates, while Novo Nordisk plunged more than 10% after phase 3 trial results showed its drug ziltivekimab failed to reduce major cardiovascular events compared to placebo.

Amazon shares jumped more than 9% in extended trading after the company reported better-than-expected second-quarter revenue and cloud growth, with its cloud segment revenue expanding 37% year over year, the fastest growth in 18 quarters. Apple shares fell more than 4% in volatile after-hours trading despite reporting stronger-than-expected fiscal third-quarter revenue driven by a 22% increase in iPhone sales. Coinbase slid more than 5% after posting a third straight quarterly loss of $359.5 million, or $1.36 per share, missing analyst estimates of a 17-cent loss, while revenue of $1.22 billion fell short of the $1.31 billion estimate. Rivian Automotive rose nearly 2% after reducing its 2026 spending plans and slightly narrowing forecasted losses this year, while reconfirming a delivery target of 65,000 to 70,000 vehicles. Reddit sank over 7% as CEO Steve Huffman described search-referral traffic from Google as choppy, even though the company beat second-quarter earnings estimates and issued guidance that sailed past expectations. First Solar gained more than 3% after reporting second-quarter earnings of $3.92 per share, beating the FactSet consensus estimate of $2.99, with revenue of $1.06 billion matching views.

Reddit is considering ending Google’s access to its content for AI use as the two companies negotiate a renewal of their 2024 data-licensing agreement worth roughly $60 million a year, the Wall Street Journal reported on July 22. Reddit shares fell 8.7% after the report, their worst session since March. The social media platform is concerned that Google’s AI-generated answers reduce traffic to Reddit, undermining its advertising business, which generated $625 million of its $663 million in first-quarter revenue. Walking away would cost Reddit the licensing fee and potentially fewer referrals from Google Search, while Google would lose a valuable source of human-generated answers. Hedge fund interest in Reddit remains notable, with 70 funds holding the stock as of March 31, though short interest stood at 12.34% of float as of mid-July, reflecting persistent valuation doubts.

Reddit is reportedly considering not renewing its $60 million-per-year licensing deal with Alphabet's Google that allows the search giant to train its AI models on Reddit's content. The social media company is weighing whether the agreement still makes sense as AI chatbots like OpenAI's ChatGPT and Google's Gemini increasingly draw users away from visiting Reddit's forums directly. The current deal represents only a small fraction of the $2.5 billion in revenue Reddit generated over the past four quarters, and the company may seek a more lucrative arrangement to compensate for potential traffic losses. Reddit's stock has fallen more than 20% this year amid these strategic deliberations.

Several stocks made significant moves on Wednesday. Pegasystems fell 13.3% after reporting a slowdown in contract growth as clients delayed software purchases. Reddit dropped 5.9% following reports it is reconsidering its AI data-licensing agreement with Google. Everforth rose 14.6% after Truist Securities upgraded the stock to Buy from Hold and raised its price target. Super Micro surged 22.9% after reporting strong preliminary fourth-quarter results, including a massive surge in its gross margin forecast, record-breaking new orders, and a major data center partnership with SpaceX.

Shares of Reddit fell 5.9% in pre-market trading after The Wall Street Journal reported the company is reconsidering its $60 million-a-year AI data-licensing agreement with Google. The deal, signed in 2024, allows Google to train its models on Reddit's content, but Google's AI Overviews feature has reduced click-through traffic to Reddit, hurting its core business. Investors are concerned about losing this high-margin revenue stream as the two companies enter a standoff over contract renewals. Reddit's vast repository of human-generated content remains valuable for AI training, and Google is incentivized to keep that data away from competitors.