Did Goldman Just Spot ‘Peak Reddit’?

A team of Goldman analysts led by Eric Sheridan published an earnings preview note that covered the digital advertising sub-sector. What caught our attention wasn’t the changes in stock recommendations, but a section further down that cited SensorTower data on growth and engagement trends across major social media platforms. 

Building on our earlier report that “ChatGPT massively reduced Reddit citations,” with SimilarWeb data showing steep declines in U.S. web traffic on Reddit, Sheridan expanded on this emerging theme, citing new SensorTower data that showed both monthly active users and time spent on Reddit have peaked. 

The decline and fall of social media pic.twitter.com/woMZkCDlsN

— zerohedge (@zerohedge) October 16, 2025

SensorTower shows Reddit’s monthly user time spent in the app or website worldwide and the U.S. steadily increased since the early days of Covid, but likely peaked earlier this year, as shown in the data below… 

Data from SensorTower indicates that user growth & total time spent in app remains somewhat stable in the U.S. while seeing stronger growth in international markets and overall continuing to surprise to the upside (albeit seeing a slight deceleration towards the end of Q3). We call out four platforms that are seeing particularly strong engagement trends in Q3: Instagram (total time spent up +17% YoY and +16% YoY globally & in the U.S., respectively), Pinterest (+14% YoY / +21% YoY), YouTube (+1% YoY /+5% YoY), and Facebook ((1)% YoY / +3% YoY).

Reddit’s global monthly active users have also plateaued over the past year. In the U.S., monthly active users peaked in the summer of 2024 and have since declined as users lose interest, likely hooked instead on short-form video platforms such as TikTok, YouTube Shorts, and Instagram or Facebook Reels.

The platforms that have seen the largest monthly average user growth since Jan 2021 levels are Reddit, Pinterest, and Instagram in the U.S. and Reddit, Snapchat and Instagram globally, according to SensorTower. In Q3, specifically, Pinterest, Instagram, and Snapchat are seeing the strongest global MAU growth amongst the comp set, with SensorTower data indicating average global MAUs grew +7% YoY, +5% YoY and +5% YoY in Q3 for each platform, respectively.

And where has the engagement shifted? Well, as the analysts point out, “short-form video remains a key driver of engagement growth for Instagram and YouTube.” 

As we’ve discussed in prior research, short-form video remains a dominant theme within digital advertising and continues to be a key driver of engagement growth (time spent, sessions per day, etc.) for several of the major US platforms. To track this theme, we analyze data from SensorTower on user growth & engagement for what we consider to be the three primary short-form video platforms: TikTok, Instagram and YouTube. The data indicates that average time spent per user per day continues to increase for both Instagram (~52 mins daily in the U.S. and ~71 mins globally in Q3, vs. ~37 mins and ~54 mins in Q3’21, respectively) and YouTube (~79 mins daily in the U.S. and ~83 mins globally in Q3, vs. ~62 mins and ~71 mins in Q3’21, respectively). For TikTok, average U.S. time spent per user per day was ~78 mins/day, down from ~85 mins/day in Q3’21 and a peak of ~92 mins/day in mid 2023.

Let’s take a step back with a focus on Reddit. At the start of the month, we cited Reddit’s U.S. daily active users data via SimilarWeb from X user Bert Tian, who stated:

$RDDT US Website DAU (source @Similarweb ) has dropped sharply after ChatGPT massively reduced Reddit citations — traffic is not even close to early-year levels.

Multiple data vendors are all picking up the shift in ChatGPT citation patterns. Reasons still unclear, but one guess is that ChatGPT may be limiting web search for free accounts as a cost-cutting move to push monetization.

As we noted at the time, who in the AI chatbot world, including OpenAI, thought it was a great idea to pull citations from Reddit, a platform plagued with opinions rather than truth, which skews chatbot answers from end-users? Also, Reddit has a far-left hate epidemic. Even citing Wikipedia is a disaster for the pursuit of truth (hence Musk’s move to launch Grokipedia).

Why are Reddit monthly users and engagements sliding? Could users just be burnt out with endless streams of Trump headlines, or perhaps they’re developing ‘TikTok Brain Rot’ with an addiction to short-form videos? Or are ChatGPT citation patterns helping to accelerate lower web traffic? There are many questions. 

One thing we do know: Shares have yet to recover since the Oct. 1 report about new traffic data.

ZeroHedge Pro Subs can read the entire report in the usual place. Chartpack is extensive, with a lot more in the report.