Snap Inc. (NYSE: SNAP) has become a cautionary tale for social media investors.
From its euphoric $83 high in 2021 to trading under $10 today, shares have plunged over 88%, battered by Apple’s privacy crackdown, monetization challenges, and stiff competition from digital ad giants.
But what if this isn’t the end of the story?
What if Snap, through a mix of AR innovation, improving ad tech, and user growth, is quietly staging one of the most unlikely rebounds in tech?
That’s the bet some analysts are beginning to consider.
With a product refresh cycle building, promising engagement data, and a valuation scraping historic lows, Snap could be a stealth turnaround trade heading into Q3 and 2026.
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Why Snap Isn’t Dead Yet
Snap’s business has evolved dramatically since the privacy apocalypse of 2021.
While Meta (NASDAQ: META) and Alphabet (NASDAQ: GOOGL) quickly bounced back, Snap struggled to regain its footing, until now.
Q1 2025 revenue came in at $1.36 billion, the best in company history and up 14% YoY.
Adjusted EBITDA rose 137%, with Snap tightening costs and improving ad conversion rates.
460 million daily active users (DAUs) marked a record, growing 9% year over year, proof of enduring product relevance.
Its ad tech rebuild is showing results.
Snap’s machine learning-powered platform drove a 30% YoY increase in iOS conversions, an important gain given Apple’s 57% U.S. smartphone market share.
Brands using its new automated bidding system reported a 32% drop in cost-per-action and a 16% increase in returns.
Snap has also leaned hard into augmented reality (AR). From AI-generated Lenses to in-app shopping integrations, it’s positioning itself as a digital experience layer.
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Strategic Positioning: Focus, Not Bloat
Unlike Meta or TikTok, Snap isn’t trying to be the everything app. It’s staying laser-focused on:
Private, visual-first communication
Augmented reality tools for creators and advertisers
Monetization through value-added features (Snapchat+)
Its new Specs AR glasses, expected in 2026, promise to blend real-world and digital content through AI-enhanced experiences.
That’s a signal that Snap wants to be part of the next computing platform.
Meanwhile, its Snapchat+ subscription tier has crossed 15 million paying users and is on pace to generate $600 million/year in recurring revenue.
That alone could add a sticky, high-margin pillar to the business.
And don’t overlook My AI, the chatbot powered by Gemini models.
With 55% YoY DAU growth in Q1 and strong early feedback, it’s helping Snap retain younger users and drive deeper session engagement.
This is a leaner, more focused Snap. And it’s betting the farm on differentiation rather than duplication.
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Outlook: What Could Spark a Turnaround
Snap’s story is one of delayed potential.
It missed the first post-COVID ad recovery, but appears better positioned for the next wave, especially as marketers double down on performance-based advertising and immersive experiences.
According to Wells Fargo, Snap’s ad growth could reaccelerate to 13% YoY in Q2 and beyond, thanks to improved ad tools and a sticky user base.
If it sustains 12–15% top-line growth and improves monetization per user, Snap could generate over $ 6 billion in revenue by 2026. That is an expansionary move.
Throw in potential operating leverage from fixed-cost AR infrastructure and reduced headcount spending, and you have a path back to meaningful cash flow.
Yet, the best part is the valuation.
Snap now trades at a P/S ratio near 2.5x, compared to 40x in 2021. That’s dirt cheap by tech growth standards, especially for a company with:
Strong brand equity in Gen Z
Positive EBITDA trends
Strategic AI partnerships
Multiple monetization levers in motion
If execution continues to improve, this setup could resemble Meta circa 2018, which was battered by headlines but reborn by product iteration.
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Bear Case: Same Old Snap?
Let’s not ignore the risks.
Snap remains unprofitable under GAAP and has yet to prove it can sustainably scale without burning cash.
Sales team turnover and a lack of leadership continuity pose near-term execution threats, especially as Q3 ramps.
The competitive moat remains thin as Meta’s scale, TikTok’s virality, and even Apple’s own AI/AR plans all loom large.
There’s also the question of user fatigue. Yes, DAUs hit a record, but time spent and monetization per user still lag competitors.
If younger users shift en masse to new platforms, Snap could lose its edge.
And with Snap’s market cap sitting around $16B, even modest multiple compression from missed quarters or leadership missteps could drive it toward the $7 handle again.
Investors should be realistic. This is still a turnaround story, not a momentum play.
Snap’s Edge: Where the Story Could Surprise
What Snap has that most struggling tech firms don’t is loyalty. Its core user base didn’t evaporate; it grew.
And unlike platforms that cater to broader demos, Snap still owns the 13–24 age group.
Its investments in machine learning, AR, and chatbot interactivity are not just tech for tech’s sake.
They are sticky, engagement-enhancing features that advertisers and brands want.
Even Snap’s stadium partnerships, like the one with RWS Global, point to a future where branded experiences blend seamlessly with entertainment, and Snap becomes the canvas.
The bottom line is that Snap’s not trying to win the whole market. It’s trying to own its niche.
And if it can keep improving monetization per user, that niche might just be enough to power the stock back into double digits, or higher.
Medical AI (Sponsored)
There’s a small AI company flying way under Wall Street’s radar—but that might not last much longer.
They’ve built Vision AI, a web-based platform that can detect diabetic retinopathy and other serious eye diseases in seconds.
It’s fast, scalable, and fits perfectly into the growing demand for early detection and preventative care.
The stock is still cheap—but the setup is intriguing:
✅ Potential FDA approval on deck
✅ Early traction in Latin America
✅ Global rollout and licensing opportunities on the horizon
As AI rewires entire industries, healthcare is next—and this stock could be an early mover in one of the most critical areas: disease detection.
Final Word
Snap Inc. won’t be for everyone. It’s volatile, unprofitable, and trying to claw back market relevance in a brutal sector.
But there are signs, meaningful signs, that the company is hitting an inflection point.
The combination of low valuation, improving metrics, and high-leverage product bets makes Snap a compelling (if speculative) addition for risk-tolerant investors.
Watch This:
Q2 earnings on July 30
AR revenue updates at the August 1 shareholder meeting
Any signals of further user monetization or AI-driven ad traction
Snap may not become the next Meta, but from here, it doesn’t have to. It just needs to keep climbing.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
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