Snap stock jumps 10% on Amazon social shopping deal

Shares of Snap Inc (NYSE: SNAP) gained about 10% today after Amazon.com Inc (NASDAQ: AMZN) confirmed that it has partnered with the social media giant.

Amazon to collaborate with Snapchat

The eCommerce behemoth will now enable Snapchat users in the U.S. to buy certain items without having to leave the social media app. According to Amazon:

Note that AMZN already has similar agreements with the likes of Pinterest and Meta Platforms as well. The deal it announced today will likely help Snap Inc accelerate recovery in its ads business.

#BTExclusive | In the wake of the growing use of deepfakes, @Snap Inc CEO @evanspiegel has emphasised the importance of authenticating real news. He said that in today’s digital age, we should assume that more and more of the content that we see has been created by #AI

Read… pic.twitter.com/Lt1DWEe19N
— Business Today (@business_today) November 9, 2023

Snap stock has gained a whopping 45% in less than two months, which doesn't put it amongst the highest stock gainers on such lists as here, yet makes it a notable one-day gain.

The said collaboration is equally exciting for Amazon as well considering Snapchat now has a user base that sits north of 400 million in total as Invezz reported here.

It is worth mentioning here that as much as 43% of the users browse through social media apps in search of goods and services, as per Tracking the Digital Payments Takeover: Monetising Social Media.

Snap, however, seems to be taking a different direction to capitalise on the rising trend of social shopping than TikTok that’s committed to introducing its own online store.

In September, the yellow camera app decided to pull the plug on its augment reality for enterprise services or ARES business. Wall Street currently has a consensus “hold” rating on Snap stock.