Reddit stock was falling Monday after a Wells Fargo analyst downgraded the shares, saying that search-traffic issues the social-networking company has faced likely aren't going away.

Ken Gawrelski downgraded shares of Reddit to Equal Weight from Overweight and cut his target for the stock price to $115 from $168. The stock was down 4.4% to $108.29 on Monday.

"Recent user disruptions likely more permanent, as search user behavior change accelerates w/ Google likely to integrate full AI search capabilities soon," Gawrelski wrote on Monday. He added that this poses a threat not only to Reddit, but also to other websites that are dependent on search traffic.

Reddit stock has fallen 34% this year, compared with a 1% increase in the S&P 500. While the company recently reported better-than-expected financial results for its first quarter, Wall Street remains concerned with slowing growth in daily active unique users as Google search evolves.

Alphabet is under pressure from investors to maintain its title as the king of search as it faces competition from artificial-intelligence models such as ChatGPT. The company has responded with AI Overviews, which are AI-generated answers to Google search queries that appear on the top of the page. This takes away the need for a user to click on webpages, such as Reddit, to get answers.

In response to a request for comment, Reddit referred Barron's to remarks by CEO Steven Huffman on the company's latest earnings call, on May 1. "We do expect some bumps along the way from Google because we've already seen a few this year," he told analysts and investors. "This is expected in any year. But given that the search ecosystem is under heavy construction, the near term could be more bumpy than usual."

Gawrelski wrote that he believes search behavior is "in a period of rapid change and Reddit, like all other beneficiaries of search referral traffic, will need to navigate through this difficult period."