Reddit (RDDT) stock fell on Wednesday alongside social media reports that the website isn’t being referenced as much by OpenAI’s ChatGPT. According to these reports, ChatGPT isn’t pulling as much of its information from Reddit, and while the exact reason why is unknown, some users argue it’s due to the platform not being considered a credible source.
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If these reports are true, it could mark an eventual end to a partnership between Reddit and OpenAI. This partnership allows the latter to train its AI on content posted on Reddit. Reddit, formerly the self-proclaimed “Front Page of the Internet,” has taken a hard stance against scraping its content recently. That includes a lawsuit against AI company Anthropic and a block on the Internet Archive’s Wayback Machine.
Another problem that Reddit has faced comes from Alphabet’s (GOOGL). Google Search has been updated to include AI results, which can prevent users from clicking into Reddit threads to read users’ topics. These summaries are more than just a concern for Reddit, as media companies also have to battle for views against AI summaries.
Reddit Stock Movement Today
Reddit stock was down 7.6% on Wednesday but remained up 30.07% year-to-date. The company’s shares have also rallied 239.32% over the past 12 months.
Investors will also note that Reddit has seen heavy trading volume today. As of this writing, roughly 5.19 million shares have changed hands. That’s closing in on the company’s three-month daily average of about 6.03 million units. This has some shareholders worried about a potential selloff amid the ChatGPT reports.
Is Reddit Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Reddit is Moderate Buy, based on 18 Buy and seven Hold ratings over the past three months. With that comes an average RDDT stock price target of $239.92, representing a potential 13.3% upside for the shares.
