Snap Stock (NYSE:SNAP)
After falling by 9% in September, the market recovered in the first week of October. However, Snap (NYSE:SNAP), the parent firm of Snapchat, has had an even stronger stock performance. S&P Global Market Intelligence reports that as of Friday noon, Snap stock had gained 10% this week, while the S&P 500 has gained 2%. The reason for this is the rising optimism on Wall Street over the future of the digital advertising industry.
What’s the Story?
Based on comments made at the beginning of the week, analysts Thomas Champion of Piper Sandler and Doug Anmuth of J.P. Morgan are both optimistic about the future of the digital advertising business. As the American economy has faltered, Snap’s advertising rates have declined. However, Champion believes that Snap’s ad pricing stabilized in July, as reported by The Fly. Three weeks into the third quarter of 2022, Snap (NYSE:SNAP) management confirmed that Champion’s annual revenue assessment was flat.
This past Wednesday, Ross Sandler of Barclays took it further. Sandler finds hope in the development of online advertising. According to The Fly, this is why he increased his price estimate for Snap stock from $15 per share to $21.
Snap stock price was expected to fall, and it did, 87% from its peak. This week, though, Snap stock price recovered thanks to the story’s overall tone improvement.
What Should You Do Now?
The price of Snap’s stock this week reflects the extent to which the firm relies on reasonable ad prices. However, the company is looking to diversify its income by developing other products, such as an augmented reality (AR) platform for businesses. Snap (NYSE:SNAP) now has business partners utilizing its augmented reality technology. Still, it hopes to expand to paying consumers soon. Future reliance on advertisements may be reduced if this is implemented.
However, at the moment, Snap’s (NYSE:SNAP) primary income source is advertisements. Accordingly, this is still the single most crucial indicator for Snap stock investors to track.
Featured Image- Megapixl @ Frui
Author Shariq Khan 
