Snap Inc (NYSE: SNAP) shares are trading higher Thursday morning after the company posted strong third-quarter results and announced a major artificial intelligence partnership. Here's what investors need to know.
What To Know: Snap beat analyst expectations with quarterly revenue of $1.51 billion versus estimates of $1.49 billion, and a quarterly loss of 6 cents per share versus estimates for a 12-cent loss. The company also announced a new $500 million stock repurchase program.
Fueling further optimism, Snap revealed a $400 million deal with Perplexity AI. The partnership will integrate Perplexity's conversational search engine directly into Snapchat, rolling out in early 2026. Snap will receive $400 million over one year through a combination of cash and equity.
Following the news, JPMorgan raised its price target on Snap to $8 from $7, citing the Perplexity deal. However, the firm maintained its Underweight rating, pointing to user and large advertiser headwinds, as well as pressured ad spending from large North American clients. The firm stated it wants to see more consistent execution and improved user trends.
JPMorgan's caution is also influenced by expected near-term headwinds to user growth. The note projects fourth-quarter Daily Active Users will decline due to factors including new platform-level age verification to remove users under 13 and infrastructure changes in regions with lower monetization potential.
Benzinga Edge Rankings: According to Benzinga Edge rankings, Snap currently has a Growth score of 31.98 and a positive short- and medium-term price trend.
SNAP Price Action: Snap shares were up 15.89% at $8.46 at the time of publication on Thursday, according to Benzinga Pro data.