Snap Stock Moves Higher Despite Broader Tech Weakness
Snap stock rose 4.2% on Tuesday, outperforming the S&P 500 and Nasdaq Composite, which both saw modest declines. This jump came after Bernstein issued a research note maintaining a market perform rating on Snap and raised its price target from $9 to $10.
Analysts at Bernstein noted stronger performance in digital advertising, Snap’s primary revenue driver, and said it’s becoming more difficult to identify likely underperformers across the internet sector. That positive shift supported Snap stock, which had been underperforming year to date.
Despite the recent gain, Snap stock is still down about 4% in 2025, compared to an 8% rise in the Nasdaq. It remains one of the laggards in a tech market that’s been selective in rewarding execution and innovation.
Snap Earnings Show Growth, But U.S. User Trends Raise Flags
Snap earnings for Q1 showed encouraging top-line growth. Revenue climbed 14% year over year to $1.36 billion, and daily active users (DAUs) grew 9% to reach 460 million. The net loss also narrowed to $140 million from $305 million, a clear improvement in operating efficiency.
However, the growth came mostly from international markets, where monetization levels remain lower. U.S. DAUs declined to 99 million, down from 100 million in Q4. That’s a concern for Snap stock, as domestic users typically drive higher ad revenue and engagement.
Another competitive risk is Snap’s positioning in artificial intelligence. Compared to major players like Meta or Google, Snap’s AI capabilities are limited. This gap affects its ability to optimize ad delivery and personalize content — both essential for long-term revenue growth.
Should you buy Snap stock right now?
Snap stock may be undervalued, especially if digital ad recovery continues. But with weak U.S. engagement and slower innovation in AI, stronger tech stocks offer more compelling near-term upside. For growth-focused investors, Snap earnings show progress — but not enough to make it a clear buy yet.
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