Was There Any Sign Snap Stock Would Run?

For questions about this article or underlying research, email help@trefis.com.

Snap (SNAP) stock returned 42.7% between July 22 and October 20, 2026, against 3.1% for the S&P 500. This rally followed a difficult stretch where the shares lost 39.3% in the six months before July 22. The largest one-day gain of the run came after Snap’s second-quarter report, which showed revenue ahead of Wall Street expectations. What had Snap already told investors before July 22?

Snap Had Shown Faster Sales Growth Before July 22

Starting in November 2025, Snap reported faster sales growth for three consecutive quarters. Earlier in 2025, management had already named small businesses as its main source of ad growth. During the earnings call for the fourth quarter of 2024, held on February 4, 2025, executives said small and medium-sized businesses were the largest contributor to ad revenue growth in 2024. They also pointed to progress in the direct response advertising business. On the August 5, 2025 call, management said the same about the second quarter of 2025.

Regulatory filings backed this up. Revenue in the quarter ended June 2025 grew 8.7% from a year earlier, and the growth rate rose in each of the next three quarters. By the quarter ended March 2026, filed on May 7, 2026, revenue growth reached 12.1%. That quarter’s operating loss was also smaller, at 4.9% of revenue against 14.2% a year earlier.

This evidence was public, building through the same months the shares fell.

Snap’s Second-Quarter Report Showed Growth Of 19%

On August 3, 2026, Snap reported that revenue rose 19% from a year earlier to $1.6 billion. The shares climbed 14.9% the next day, marking the largest one-day move of the run. Management said small and medium-sized businesses were again a source of strength, alongside spending tied to the World Cup. Snap’s peers did not move the same way. From July 22 to October 20, Meta Platforms returned 10.8%, Pinterest returned 2.0% and Alphabet lost about 0.5%.

The report also showed the sources of this growth. Advertising revenue grew 9% to $1.28 billion, while other revenue, led by Snapchat+, Memory Storage and Lens+, grew 85% to $316 million. Other revenue now makes up about a fifth of Snap’s revenue.

Is Snap’s Faster Growth Still Building?

Management expects slower growth in the third quarter of 2026, forecasting third-quarter revenue of $1.70 billion to $1.74 billion. At the midpoint, that would represent growth of about 14% from a year earlier, against 19% in the second quarter. Management said the guide reflects the expected normalization of World Cup-related spending and a more difficult year-over-year comparison.

Management expects what it calls direct revenue to keep growing materially faster than the overall business. Executives said less than 3% of Snap’s monthly active users are paying subscribers, leaving substantial room to grow direct revenue over time.

Revenue growth, and the share of it that comes from subscriptions, is the measure to watch when Snap reports third-quarter results, expected on or around November 4, 2026.

Does This Mean You Should Act On SNAP?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

Spot an error or want more like this? Tell us in 10 seconds.