5 Tech Stocks to Avoid Until 2024

4. Snap Inc. (NYSE:SNAP)

Number of Hedge Fund Holders: 54

Snap Inc. (NYSE:SNAP) is a California-based camera and social media company. Snap Inc. (NYSE:SNAP) stock has lost about 78% in value year to date as of August 9, and it is one of the most hammered social media stocks on the market. On July 21, the company reported its Q2 results, posting a GAAP loss per share of $0.26 and a revenue of $1.11 billion, falling short of Wall Street consensus by $0.05 and $23.58 million, respectively. The Q3 guidance also fell flat, as the management noted that user momentum is continuing but revenue is “approximately flat” year-over-year.

On July 25, Argus analyst Jim Kelleher downgraded Snap Inc. (NYSE:SNAP) to Hold from Buy without a price target after the company’s Q2 results. The analyst sees signs of soft advertising spending “amid still-high costs”. He said that weakening digital ad-spending patterns, combined with changes to ad tracking on Apple iOS have led to the downgrade. Similarly, on July 25, MoffettNathanson analyst Michael Nathanson downgraded Snap Inc. (NYSE:SNAP) to Market Perform from Outperform with a price target of $9, down from $23, in light of the company’s Q2 report. The analyst’s note to investors was titled “vote of no confidence”. 

According to Insider Monkey’s data, 54 hedge funds were long Snap Inc. (NYSE:SNAP) at the end of Q1 2022, compared to 55 funds in the last quarter. Stephen Mandel’s Lone Pine Capital held the leading stake in the company, comprising 18.4 million shares worth $664.4 million. 

Here is what Baron Opportunity Fund has to say about Snap Inc. (NYSE:SNAP) in its Q4 2021 investor letter:

“Snap Inc. is the leading social network among teens and young adults in North America and a growing number of overseas markets, including Western Europe and India. Shares fell this quarter on a greater-than anticipated impact from Apple’s new privacy changes for iOS mobile devices. These changes made it more difficult for Snapchat to measure the effectiveness of ads shown on its platform. We believe this is a near-term, industry-wide issue for which Snap is already developing a solution. Longer term, we continue to view Snap favorably as the company sustains its rapid pace of product innovation and expands its premium partnerships with advertisers.”