Reddit Inc. (NYSE:RDDT) shares are trading higher Monday following reports the company introduced two new AI-powered advertising tools intended to support brands in navigating the platform's complex user discussions.

What To Know: The first tool, "Reddit Insights," allows advertisers to access real-time data about trends and conversations across the platform, which can be used to test or adjust marketing strategies, according to Reuters.

The second feature, "Conversation Summary Add-ons," enables brands to display select user comments beneath their ads, specifically those considered positive or supportive of the ad's subject matter. Reddit framed this as a way to help advertisers build credibility using authentic community voices.

The report indicates that WPP Media, a major media buying agency, recently downgraded its forecast for global ad revenue growth this year due to shifting U.S. trade policies. That makes AI-based tools more significant for ad platforms trying to convince brands to spend amid a cautious economic climate.

Separately, Reddit's content is showing up more frequently in Google's AI-generated search overviews. Data from Semrush shows Reddit is now the second-most cited source in Google's summaries, just behind Quora. The increase in visibility comes on the heels of Reddit's $60 million content licensing deal with Google in 2024, allowing Google to use Reddit's data for training AI and surfacing results.

Analysts have noted that a large portion of Reddit's recent traffic growth has come from users who don't log into the site, often arriving from a Google search just to find a quick answer and leaving soon after. These visitors don't contribute much to Reddit's ad-based business model, which relies heavily on engaged, logged-in users. Further complicating the situation, Google's AI-generated summaries reduce the need for users to even click through to Reddit, potentially cutting off traffic before it arrives.

Despite Reddit's forecast in May that second-quarter revenue would exceed expectations, CEO Steve Huffman acknowledged that increased integration with Google's AI services might impact site traffic.

RDDT Price Action: Reddit shares were up 4.66% at $123.70 at the time of publication Monday, according to Benzinga Pro.

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