New York, January 28, 2026, 15:04 EST — Regular session
- Reddit shares dropped roughly 1.8% in afternoon trading, following up on Tuesday’s 9% plunge
- Cleveland Research highlighted weaker advertising momentum in 2026 alongside increased budget competition
- A filing revealed CTO Christopher Slowe offloaded 14,000 shares through a predetermined trading plan
Reddit shares dropped another 1.8% to $192.83 in afternoon trading Wednesday, following a 9% plunge the day before. The stock fluctuated between $189.70 and $198.88 during the session.
This shift is significant because investors now react to even small changes in 2026 growth forecasts as market-moving news. With Reddit’s next earnings report looming, traders are already weighing in on the key question: how much of the advertising growth is sustainable, and how much was just a temporary spike before budgets shift elsewhere.
Cleveland Research analyst Ross Walthall reported his latest checks painted a “less optimistic” picture for growth heading into 2026, highlighting a slowdown in new advertisers and wavering confidence from major U.S. agencies on ramping up spend. European and smaller U.S. partners appeared more stable, he noted. The research update showed just 59% of partners beating return-on-investment targets, down sharply from 76% last quarter. Walthall emphasized that wider adoption of Reddit’s Conversion API—tools that track whether ads drive actions like purchases—would be crucial to unlocking more direct-response ad dollars. His firm projects 2026 revenue growth of 36%, reaching $2.9 billion, below the $3.0 billion consensus cited. The note also flagged increased competition from TikTok and Snap for 2026 ad budgets, along with emerging risk from “ChatGPT test budgets” gaining traction. Investing.com
Direct-response advertising demands hard proof — clicks, signups, purchases — not just eyeballs. When that data wavers, budgets shift quickly, and platforms see the impact in their quarterly forecasts.
Intercontinental Exchange has rolled out “Reddit Signals and Sentiment,” a new data tool that converts Reddit discussions into structured market indicators for investors. “The Reddit community generates a huge volume of complex, unstructured, yet often highly insightful information,” said Chris Edmonds, president of ICE’s Fixed Income and Data Services, in the announcement. Business Wire
An insider filing revealed that Reddit’s chief technology officer, Christopher Slowe, offloaded 14,000 Class A shares on Jan. 22. Sale prices ranged between $210.41 and $215.85 per share. According to the filing, these transactions were executed under a Rule 10b5-1 plan put in place on May 9, 2025. SEC
The near-term risk is clear: if the upcoming earnings report shows ad demand slowing more than anticipated—or if the company signals caution on 2026—the stock could remain under pressure. Budget competition isn’t just theoretical, and any sign of fading pricing power usually hits sentiment around high-growth stocks fast.
Reddit plans to release its fourth-quarter and full-year 2025 results after markets close on Feb. 5. The company will follow up with a conference call at 4:30 p.m. ET that day, it announced.
The next major catalyst for the stock comes with the Feb. 5 update, as investors seek confirmation that the ad engine continues to grow and that measurement tools like conversion tracking are driving steady, repeat spending.
