Snap Inc. (SNAP): A Bull Case Theory

We came across a bullish thesis on Snap Inc. on Investment Ideas by Antonio’s Substack by Antonio Linares. In this article, we will summarize the bulls’ thesis on SNAP. Snap Inc.'s share was trading at $8.53 as of September 22nd. SNAP’s forward P/E was 23.70 according to Yahoo Finance.

Snap (SNAP) remains one of the most underappreciated social media platforms, despite boasting 932M monthly active users (MAUs) as of Q2 2025 and over 350M daily AR users. The company has steadily grown engagement across key verticals: Snapchat+ subscribers increased from 15M to 16M QoQ, games engagement rose 40% YoY to 175M MAUs, Spotlight usage surged 23% YoY to nearly half of all time spent on the platform, and video chat time climbed 30% YoY.

This engagement is translating into monetization, with free cash flow per share rising sharply and annual revenue run-rate from Snapchat+ reaching $700M. Trading at just over 2x sales, Snap’s valuation implies the market has left it for dead, creating an increasingly asymmetric opportunity.

Central to Snap’s long-term thesis is its differentiated AR-first philosophy. CEO Evan Spiegel highlighted that Snap has invested over $3B in building the world’s only vertically integrated AR platform, supported by proprietary data and unique developer tools such as Easy Lens, real-time transcription APIs, and 3D object generation.

These capabilities are designed to position Snap at the forefront of AR-driven computing, where developers can create differentiated, real-time augmented realities. Early monetization improvements are also evident: Sponsored Snaps, launched in late 2024, are showing stronger engagement, conversion, and dwell times than traditional ad formats, promising enhanced unit economics.

A Q2 2025 ad platform error briefly spooked investors, causing a 25% stock drop, but the issue has been fixed. While leadership perception remains mixed, Snap’s fundamentals are strengthening, with resilient engagement, rising monetization, and a clear AR vision. If execution continues, the stock offers compelling upside from current levels.

Previously we covered a bullish thesis on Snap Inc. (SNAP) by LongYield in May 2025, which highlighted strong revenue growth, profitability gains, and the rising contribution of Snapchat+ alongside AI and AR investments. The company’s stock price has appreciated approximately by 8.9% since our coverage. The thesis still stands as fundamentals remain solid. Antonio Linares shares a similar view but emphasizes Snap’s AR-first strategy.

Snap Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held SNAP at the end of the second quarter which was 39 in the previous quarter. While we acknowledge the potential of SNAP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.