• by Laurie Sullivan  @lauriesullivan, March 18, 2025

Last year an expanded partnership with Google enabled Reddit to use the search company's Vertex AI, a Google Cloud development platform. The goal was to improve search on the Reddit platform.

Maybe it did, but Reddit's stock has declined 41% in the last month despite its access to Google's technology.

Redburn Atlantic analyst James Cordwell recently initiated coverage on Reddit's stock with a "sell" rating, according to Reuters, which initially reported on the expanded relationship. Cordwell explained that Reddit's growth in daily active users (DAUs), a metric to determine traffic on a web-based platform, remains vulnerable to algorithm changes by Google.

Reddit CEO Steve Huffman earlier this year wrote in a letter to shareholders that a Google search algorithm change later in the fourth quarter of 2024 caused some volatility with user growth, but Reddit's search-related traffic recovered in the first quarter of 2025.

In exchange, Google said it will integrate Reddit content more across its products, making it easier for users to find helpful information.

It gave Google access to Reddit's API, a set of rules and protocols that allow different software applications to communicate with each other — for real-time, structured content, improving the accuracy and relevance of displayed information.

Cordwell said the growth of Reddit's organic users, who log in to the platform to use it for reasons other than seeking an answer to one question, has largely been unchanged during the past six months -- signaling that there has been little structural change in the appeal of Reddit, Reuters reported.

Reddit's stock price, hovering at $125.56 after a $119.92 low, encapsulates the tension between opportunity and fragility," wrote Wallstreetpit.com. "The API access granted to Google promises a tighter symbiosis, potentially amplifying Reddit's visibility, but Cordwell's analysis suggests structural challenges persist, with little evidence of a broader uptick in the platform's intrinsic appeal."

The point Wallstreetpit.com makes is very valid.

"This duality reflects Reddit's position in a digital landscape where partnerships with tech giants like Google can both propel and imperil growth, especially as AI tools like Vertex AI reshape how content is surfaced and consumed," says Wallstreetpit.com.

This story has been updated.