Bernstein Says Snap Inc. (SNAP) Faces a Complex AI Turning Point

Another one of the AI Stocks Wall Street Is Watching Now is Snap Inc., with analysts looking at its AI infrastructure plans, improving growth metrics, and robust momentum in direct sales.

On May 7, Bernstein SocGen Group analyst Mark Shmulik reiterated a Market Perform rating and $7.00 price target on the stock. According to the firm, Snap is facing some complex challenges despite improvements in some of its key metrics.

If you want attention in this tape, announcing an Allbirds-like AI transformation might do the trick. As it stands, the self-described “crucible moment” for Snapchat remains incredibly complex.

While Snap may be trying to reframe its story around AI, the firm believes that its current position remains rather complicated because of metrics such as US and EU DAUs, ad revenues, and GAAP profitability, which continue to lag.

This is despite other metrics, such as revenue, global users, and FCF growth, having improved for the company.

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The strongest part of Snapchat’s business appears to be its ability to grow direct sales, noted the firm, which now account for almost 20% of revenues. Even though this isn’t the primary business it wanted, Bernstein believes that it may be the business it is best suited to deliver.

Snap Inc (NYSE:SNAP), based in California, is a technology and social media company founded in 2011.

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