Reddit Stock Surges to 116th in Trading Volume Amidst AI Controversy and Legal Battles

On June 13, 2025, Reddit (RDDT) saw a significant increase in trading volume, with a total of $762 million in shares exchanged, marking a 36.74% rise from the previous day. This surge placed Reddit at the 116th position in terms of trading volume for the day. The stock price of Reddit also rose by 1.70%, marking the second consecutive day of gains, with a total increase of 2.74% over the past two days.

Reddit, Inc. is currently under investigation for potential securities fraud. The leading securities law firm Bleichmar Fonti & Auld LLP has initiated an investigation into Reddit for alleged violations of federal securities laws. The investigation focuses on Reddit's claims regarding the impact of Google's AI on its user growth. Reddit had assured investors that Google's AI capabilities did not significantly affect its user traffic. However, it has been revealed that Google's AI has reduced the need for users to visit Reddit, as answers to their queries are now provided directly through Google's search results.

This revelation has led to a decline in Reddit's stock price. On May 21, 2025, Wall Street analyst Baird lowered its price target for Reddit stock due to concerns about the impact of Google's AI on Reddit's user growth. This news resulted in a significant drop in Reddit's stock price, falling by over 9% on that day.

Reddit has also filed a lawsuit against Anthropic, an AI startup, accusing it of scraping user comments and other content from Reddit over 100,000 times, even after being notified to stop. This legal action adds to the challenges Reddit is currently facing in the market.