Snap Inc. (SNAP): A Bull Case Theory

We came across a bullish thesis on Snap Inc. on topsecretstocks’s Substack. In this article, we will summarize the bulls’ thesis on SNAP. Snap Inc.'s share was trading at $6.93 as of January 30th. SNAP’s forward P/E was 17.89 according to Yahoo Finance.

Snap Inc. operates as a technology company in North America, Europe, and internationally. SNAP has solidified its position as a camera-first platform, with the Snapchat app driving nearly all revenue through digital advertising, including Snap Ads, Sponsored Lenses, and Geofilters targeting Gen Z and Millennials.

Supplementary efforts in hardware (Spectacles) and e-commerce remain nascent, but the core app continues to engage a massive, growing audience. A transformative shift since the 2017 IPO has been the success of Snapchat+, which reached 17 million subscribers in late 2025, providing a high-margin revenue cushion that reduces Snap’s reliance on volatile ad markets.

Daily active users hit 477 million in Q3 2025, up 8% year-over-year, while monthly active users reached 943 million, putting Snap on a clear trajectory toward 1 billion users. Although North America remains the most profitable region, the Rest of World segment—led by India and Pakistan—is the fastest-growing user base.

Financially, Snap posted its most stable results in years, with Q3 2025 revenue of $1.51 billion, a 10% increase YoY, net losses reduced by over 30% to $104 million, and Adjusted EBITDA reaching $182 million (12% margin). Its AI and AR strategy is reshaping the platform, with generative AI lenses used billions of times by over 500 million users and the Perplexity AI partnership contributing $400 million over one year.

New ad formats like Sponsored Snaps have driven direct response revenue up 8% YoY. Innovation continues with tools like “Animate It” for video generation. While analysts remain largely neutral, Snap’s combination of Snapchat+, AI-driven advertising, and user growth has stabilized its business, with the next major catalyst being whether Spectacles can transition from niche hardware to a mainstream product, unlocking further upside potential.

Previously, we covered a bullish thesis on Snap Inc. (SNAP) by LongYield in May 2025, which highlighted Q1 revenue growth to $1.363 billion, Snapchat+ reaching 15 million subscribers, narrowing net losses, and AI and AR investments to enhance advertising. SNAP’s stock price depreciated by approximately 11.49% since our coverage due to uncertainty from lack of guidance and macroeconomic headwinds. topsecretstocks shares a similar perspective but emphasizes broader user growth, Snapchat+ hitting 17 million, and AI/AR initiatives as stabilizing factors.

Snap Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 50 hedge fund portfolios held SNAP at the end of the third quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of SNAP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SNAP and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.