New York, Feb 6, 2026, 07:36 EST — Premarket
- Snap shares barely moved in premarket action following a drop of over 13% on Thursday.
- A cautious revenue forecast for the first quarter weighed on the stock, despite stronger-than-expected fourth-quarter sales and the announcement of a $500 million buyback program.
- Traders are focused on ad demand, subscription growth, and the timing of the Perplexity AI search partnership.
Shares of Snap Inc (SNAP.N) held steady in premarket trading on Friday at $5.12, following a sharp drop in the regular session. The stock fell 13.4% on Thursday and now trades roughly 55% below its 52-week high. Volume remained notably elevated.
Snap’s story now carries a sharper edge: can it keep pulling more ad dollars without sacrificing user growth? Direct-response ads, designed to drive purchases or app installs, have boosted results, but major brands can shift their budgets quickly.
Snap surpassed fourth-quarter revenue expectations, driven by a 28% jump in active advertisers and fresh ad formats like Sponsored Snaps and Promoted Places. It projected first-quarter revenue between $1.50 billion and $1.53 billion, with adjusted EBITDA forecasts of $170 million to $190 million. Analysts had anticipated around $1.55 billion in revenue and $177.9 million in adjusted EBITDA. “The ads platform still has a long way to go in attracting big budgets from enterprise advertisers,” noted Emarketer analyst Max Willens. Reuters
CEO Evan Spiegel highlighted the quarter as a clear sign of Snap’s “pivot toward profitable growth,” focusing on expanding margins. The company reported a fourth-quarter net income of $45 million and free cash flow of $206 million. Snap also announced a $500 million share buyback program and ended the year with $2.9 billion in cash, cash equivalents, and marketable securities. investor.snap.com
A Form 10-K filed late Thursday revealed that a large portion of Snap’s infrastructure relies on third-party cloud services like Google Cloud and AWS. The company noted a strategic partnership struck in December to embed Perplexity’s conversational AI search engine, cautioning that any downtime or delays from external AI providers could impact the product. Snap also named Meta, ByteDance, and Alphabet as its key competitors.
Brokerage opinions diverged. B. Riley’s Naved Khan upgraded Snap to buy. On the other hand, Canaccord Genuity’s Maria Ripps and Wells Fargo’s Ken Gawrelski lowered their price targets, citing concerns over ad growth and Snap’s spending gap compared to larger competitors. Cantor Fitzgerald cut its target from $8 to $7 and maintained a “neutral” rating, according to The Fly. Barron’s
Tensions lingered in the broader market as Alphabet’s announcement to boost AI investment weighed on major tech stocks. The Nasdaq dropped 1.59% Thursday, with futures quiet ahead of Friday’s open.
Snap faces the risk that marketers might cut back or redirect budgets toward bigger ad platforms if economic signals worsen. A drop in user engagement or delays in launching new ad tools could also limit its pricing power.
Next week’s U.S. January jobs report, pushed to Feb. 11 after a short government shutdown, will be a key focus for investors seeking signs on consumer spending and advertising plans. Snap faces a crucial moment to prove stronger revenue growth early in Q1 and offer a clearer timeline for integrating Perplexity.
