Reddit shares logged their steepest drop in more than six months on Wednesday, weighed down by social media speculation over slowing site traffic and a sharp pullback in referrals from ChatGPT.

The stock dropped 11.9% to a nearly two-month low.

On Tuesday, Andrea Bosoni, a marketing strategist, shared a chart on X showing that Reddit citations in ChatGPT suddenly dropped after Sept. 11. Another user on X posted a chart, sourced from analytics firm SimilarWeb, showing a decline in Reddit's U.S. daily active users since the same date.

If accurate, the data suggests Reddit's revenue from its content-licensing deal with OpenAI could shrink, an inopportune development as the online forums site enters renewal talks with both OpenAI and Google.

It is also a setback to Reddit's growth plans, given that the AI content partnerships, which have helped diversify revenue streams beyond advertising, are viewed as a key driver for the company.

On Stocktwits, Reddit was among the top trending tickers late Wednesday, with retail sentiment shifting to 'extremely bullish' (91/100) from 'bullish' the previous day. The 24-hour message volume change leading up to late Wednesday was about 670%. Users were split on whether the traffic concerns were material or the selloff overdone, with several voices urging "buy the dip."

RBC Capital Markets analysts stated in an investor note that the DAU data circulating on social media is consistent with one of their recent notes. Reddit's citation share on ChatGPT had dropped from the 29.2% range to 5.3% since Sept. 10, according to RBC.

Despite Wednesday's drop, RDDT stock is still up 24% year-to-date.

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