Snap Surges 37%, Facebook Follows As Social Media Stocks Rally In Upbeat Market

Snap led tech stocks higher Wednesday after stellar numbers that beat Wall Street estimates with daily active users jumping 20% to $229 million.

The market wasn’t phased that the social media outlet pulled its guidance for the second quarter due to Covid-19 market conditions, something many company’s are doing. Its net loss was much narrower than anticipated and revenue rose 44%.  Snap gets almost all sales from advertising, which CEO EVan Spiegel noted grew rapidly in January and February but began to slow in March as the impact of the coronvirus pandemic hit. But he said, “These high growth rates in the beginning of the quarter reflect our investments in our audience, ad products, and optimization, and give us confidence in our ability to grow revenue over the long term. Snapchat’s young user base, he said, will help “jumpstart” an economic comeback.

Facebook shares rose nearly 7%. The social media giant announced late Tuesday it spent a hefty $5.7 billion – a large investment for Facebook – for a stake in Jio Platforms, the digital division of giant Indian conglomerate Reliance Industries, expanding its foothold in a massive, strategic market where WhatsApp already has 400 million users and Instagram is growing fast.

Stock of Google parent Alphabet was up 3.85% and Amazon shares gained 1.52%.

In a move that analysts considered a shot by Google against Amazon, the search giant on Wednesday announced plans to shift the way it handles e-commerce listings. In a blog post, Google Commerce President Bill Ready said listsings on the Shopping tab that show up when people search will be largely free.

“As Amazon continues to see rapid growth in its advertising business and arguably becomes more of a default lower funnel starting point for many products for consumers and particularly Amazon’s Prime subscribers, we think Google’s move is also a response to help the platform draw in additional consumers and retailers,” Cowen analyst John Blackledge said in a note.

Snap, along with Netflix and WarnerMedia parent AT&T, launched a key round of media company earnings this week. Netflix shares eased 2.86% depite wowing Wall Street and the indsustry with a huge jump in subscribers. Some on the Street felt the good news was already baked into the stock, a favorite of this the shelter-at-home era, which has posted sharp gains since the start of the year. AT&T missed targets this morning and was off 1.34%.

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