What Happened?
Shares of social network Snapchat (NYSE: SNAP) jumped 8.3% in the morning session after the stock extended its positive momentum as the company confirmed its plan to release consumer-ready Spectacles in 2026 and announced a significant software update for its augmented reality glasses.
The key catalyst was the unveiling of Snap OS 2.0, a major software overhaul for its Spectacles hardware. This tangible product development provided a fundamental boost, showcasing the company's continued innovation in the augmented reality space ahead of the planned public launch. Adding to the positive momentum was the ongoing uncertainty surrounding the U.S. operations of its chief competitor, TikTok. Investors appeared to view Snap as a primary beneficiary of any potential disruption to TikTok's market share. The surge in Snap's stock was also accompanied by some of the highest trading volumes in the company's history, signaling a dramatic increase in investor interest.
After the initial pop the shares cooled down to $8.50, up 4.2% from previous close.
Is now the time to buy Snap? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Snap’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock gained 3.8% on the news that an analyst note from JMP Securities highlighted positive feedback from major marketers about the platform's performance.
JMP Securities maintained its Market Perform rating on the company, citing strong advertiser sentiment. For example, a performance marketing manager from Nike told the firm that Snap delivered the most incremental reach to younger consumers after Meta and Google. The manager also noted they did not hold Snap to the same return on ad spend requirements as other platforms due to this unique reach. Furthermore, feedback from Spotify indicated that Sponsored Snaps were 'highly performant,' a success the music streamer attributed mainly to the 'very low' cost-per-thousand impressions (CPMs) for these ad units. This positive commentary followed the company's recent announcement of its new fifth-generation Spectacles and Snap OS 2.0.
Snap is down 24.3% since the beginning of the year, and at $8.50 per share, it is trading 33.9% below its 52-week high of $12.86 from December 2024. Investors who bought $1,000 worth of Snap’s shares 5 years ago would now be looking at an investment worth $333.90.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
