Key TakeawaysReddit’s shares declined approximately 9% following a Wall Street Journal report about potential restrictions on Google’s AI training data accessA $60 million annual data-licensing agreement with Google, established in 2024, faces potential renegotiationCEO Steve Huffman divested roughly $3.56M in shares on July 15; COO Jennifer Wong sold approximately $7.75M on the same dateSecond quarter 2026 financial results scheduled for release after trading hours on July 30Jefferies analysts observed Reddit’s expanding presence in social media advertising during the second quarterShares of Reddit (RDDT) experienced a significant decline on Tuesday, plummeting as much as 9.15% during morning hours to reach an intraday bottom of $166.87, before staging a modest recovery to approximately $169.59.Reddit, Inc., RDDTThe downturn was sparked by a Wall Street Journal article disclosing that Reddit leadership has been conducting internal deliberations regarding the possibility of restricting Google’s access to its platform content for artificial intelligence training applications.Central to this development is Reddit’s annual $60 million data-licensing arrangement with Google, initially established in 2024. This agreement permits Google to utilize Reddit’s extensive repository of community-generated content for training its artificial intelligence systems.The partnership has encountered challenges. Google’s “AI Overviews” functionality — which provides immediate answers to search inquiries on the results page — has been diminishing Reddit’s referral traffic by decreasing click-through rates to the platform.This friction has cast uncertainty over contract renewal prospects, triggering negative investor reaction. Reddit’s AI licensing revenue stream has constituted a crucial element of the bullish investment thesis surrounding the stock, making any potential disruption to this income source particularly damaging to its valuation.Executive Stock Sales Compound ConcernsThe licensing controversy wasn’t the sole factor pressuring the stock. CEO Steve Huffman liquidated approximately $3.56 million in shares on July 15. COO Jennifer Wong offloaded around $7.75 million on the identical date. This insider selling activity had already been dampening investor confidence prior to Tuesday’s price movement.The broader equity markets provided minimal support. The S&P 500 remained essentially unchanged during the session, while the Nasdaq posted modest losses — offering little reprieve for a high-valuation internet stock like Reddit.Reddit has declined 27.8% year-to-date. At current levels near $169, the stock is trading approximately 35.5% beneath its 52-week peak of $270.71, reached in September 2025.Upcoming Q2 Financial ReportReddit is scheduled to announce Q2 2026 financial results following the close of trading on July 30. The licensing uncertainty introduces an additional variable for investors attempting to forecast data revenue expectations ahead of that announcement.It bears mentioning that Google isn’t the sole party with negotiating power in this situation. Reddit’s substantial collection of authentic human-generated content has become increasingly valuable in a landscape saturated with AI-produced text. OpenAI and additional AI companies represent potential alternative licensing partners — and Google has strategic incentive to prevent Reddit’s data from reaching its rivals.Regarding advertising performance, Jefferies recently highlighted that Reddit maintained its trajectory of capturing increased social media advertising market share during Q2, indicating the fundamental business continues performing well.Reddit has experienced 52 single-day movements exceeding 5% during the past year, demonstrating that volatility is characteristic of this equity. The intraday low on Tuesday reached $166.87.The post Reddit (RDDT) Stock Plunges 9% on Google AI Data Deal Concerns appeared first on Blockonomi.