NEW YORK, May 29, 2026, 16:02 (EDT)
Snap Inc. (SNAP) traded down almost 2% late Friday while broader U.S. stocks moved up. Investors kept up the pressure on the Snapchat parent as it struggles to steady ad growth. Shares were last at $5.80, off 11 cents. The stock touched $5.73 at its low and $5.94 at the high Friday.
Timing is key here. Snap wants to move past cost cuts and build a growth case. But the market still views Snap as a company with young users, a big ad business, and less room for mistakes compared to larger peers.
The move didn’t track with the rest of the market. SPDR S&P 500 ETF and Invesco QQQ Trust were up late Friday, but Meta Platforms and Pinterest, which are also ad-facing, traded down.
Snap shares stayed quiet. Trading volume was under the daily average, and the stock held far beneath its 52-week high of $10.41, showing sentiment has come down since earlier optimism on artificial intelligence and restructuring.
Snap’s first-quarter numbers put some wind in the bulls’ sails. Revenue rose 12% to $1.529 billion from a year ago. Net loss shrank to $89 million. Adjusted EBITDA jumped to $233 million. Free cash flow was $286 million, after capital spending.
Snap CEO Evan Spiegel said the company has “returned to growth in daily active users.” Snap reported 483 million DAUs, which measures the number of people who use the app every day. Monthly active users came in at 956 million. Snap Inc. Investor Relations
Ads are still dragging. Advertising revenue was up just 3% to $1.24 billion for the quarter. Other revenue, which got a boost from subscriptions and new paid features, surged 87% to $285 million. Snap said big advertisers in North America still weighed on results. But small and midsize advertisers in the region increased ad spending about 30%.
That split is what’s hanging over the stock. Subscription numbers keep rising, but the market is still looking at Snap’s ability to pull in more ad spending versus bigger rivals with stronger targeting and a wider audience.
Snap has pointed to cost cuts. In April, the company said it would lay off around 1,000 workers, about 16% of its staff, and shut down over 300 open positions. The move followed demands from activists and was intended to boost efficiency.
AI remains a swing factor and things have gotten more tangled. Barron’s reported this month that Snap and Perplexity dropped a planned $400 million AI search integration. UBS analyst Stephen Ju said he wasn’t surprised by the news, stuck to his Neutral rating and $7 price target, and warned a fast rebound in major North American ad budgets looked “an unlikely scenario” as advertisers keep chasing TikTok. Barron’s
Morningstar analysts Malik Ahmed Khan and Jivyaa Vaidya lowered their fair value estimate for Snap to $7, down from $9, after the quarter. The analysts pointed to falling U.S. user numbers.
But risks cut both ways. If North American ad demand picks up faster than expected, and subscriptions keep climbing without hurting engagement, Snap might deliver more operating leverage than the market assumes. On the flip side, if big advertisers remain slow and user numbers are weak in key markets, with geopolitical headwinds and restructuring costs still a drag, revenue could suffer. Snap is guiding for second-quarter revenue of $1.52 billion to $1.55 billion and adjusted EBITDA between $175 million and $200 million. It also flagged $95 million to $130 million in restructuring charges, plus ongoing legal and regulatory risks.
Right now, the market sees the stock as a turnaround, not a growth play. Snap’s next hurdle is to prove its leaner model lasts long enough to keep investors from moving on to the next ad-cycle rebound story.
