Snap stock saw a significant surge on Tuesday fueled by reports of an agreement allowing users to purchase Amazon products directly through Snapchat. This deal mirrors a similar arrangement between Amazon and Meta, the parent company of Facebook.
As per the deal, Snap users will have the capability to buy Amazon products advertised on Snapchat within the app itself. The partnership was first disclosed by The Information late Monday.
Following this news, Snap stock rose by 7.5% to close at 12.15 during trading hours on Tuesday.
Amazon Collaborates With Snap and Meta
For Snap users, real-time pricing, Prime eligibility, delivery estimates, and product details will be visible in select Amazon product ads within Snapchat.
According to an Amazon spokesperson, “Customers will be able to shop Amazon’s Snapchat ads and check out with Amazon without leaving the social media app. In-app shopping with Amazon is available for select products advertised on Snapchat and sold by Amazon or independent sellers in Amazon’s store.”
Snap was not immediately available for comment on this development.
This partnership with Amazon closely resembles the one established between Amazon and Meta. Users on Meta’s Instagram and Facebook will also have the ability to directly shop on Amazon after linking their accounts.
Moreover, Amazon has an advertising collaboration with Pinterest as well.
These collaborations are strategically significant for Amazon, particularly with the burgeoning U.S. e-commerce business of TikTok, driven by its social media platform.
On Tuesday, Amazon stock surged by 2.3%, closing at 145.80.
Snap Stock: Rebounding Sales
Meanwhile, Snap recently reported year-over-year sales growth for the third quarter of this year. The company experienced a 5% revenue increase, as per the earnings report published on October 24. CEO Evan Spiegel expressed that Snap’s successful sales recovery was due to the company’s efforts to diversify revenue streams.
Before the boost from the Amazon deal, Snap shares had already climbed by 23% since the earnings report was released.
However, the company still holds a weak IBD Composite Rating of 67 out of 99, as well as an EPS Rating of 15 out of 99, indicating minimal earnings growth.
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