From the street, a building in Santa Monica doesn’t seem like much. It’s a low-key, beachfront location where you might anticipate a yoga studio or a wellness company selling adaptogens. You wouldn’t believe that Snap Inc. once had a $130 billion valuation and a founder who reportedly turned down a $3 billion offer from Mark Zuckerberg before he was old enough to rent a car without a surcharge. Snap Inc. has been occupying this stretch of coastline for years.
It seems like a very long time ago. On a day with little activity, the stock ended Thursday at $5.72, up 3 cents. At $9.48 billion, the market capitalization is a small portion of its former value. You can learn everything you need to know about investor sentiment from the 52-week range of $3.81 to $10.41: unsure, then more unsure, then briefly hopeful, then unsure again.
Right now, Snap’s price isn’t what stands out. It’s the atmosphere surrounding the cost. Exactly, analysts haven’t run away. Simply put, they no longer pretend. Earlier this month, RBC lowered its target from $10 to $8 while maintaining a Sector Perform rating, which roughly translates to “we’re watching, but please don’t ask us to be excited.” Saken Ismailov of Freedom Broker went one step further, reducing his target to $7 and downgrading the stock to Hold. Morgan Stanley increased its price from $6.50 to $7 in a move that bordered on sympathy. No one is writing victory speeches, but the average twelve-month target is around $7.63, which would be a healthy bounce.
And then there’s the insider activity, which never appeals to those who keep an eye on these things. CFO Doug Hott reduced his stake by 39% by selling roughly $696,000 worth of stock at $5.60 a share. Over the past year, Evan Spiegel himself sold about $10 million worth of shares for about $8 apiece, which is significantly more than the current price of the stock. It’s been months since insiders purchased anything. Although their ownership of 21% of the company is still significant, the direction of travel is more important than the total amount. No one is contributing.
Nevertheless, the company isn’t broken, which is what keeps Snap intriguing. Q1 2026 revenue was $1.53 billion, up 12.15% from the previous year. The ad platform and subscriptions displayed what RBC referred to as “green shoots,” a term that has been used to describe Snap so frequently that it is nearly meaningless. However, the cautious advice revealed a different story: the $400 million, high-profile Perplexity deal from late last year came to an end. Tensions in the Middle East reduced advertising spending. Large advertisers did not change from year to year. There is growth, but it’s the kind of growth that doesn’t alter people’s opinions.
On Lenny’s Podcast in April, Spiegel made a statement that most CEOs in his position wouldn’t. He cautioned that tech executives are underestimating the impending public backlash against AI and that people won’t embrace it as swiftly or enthusiastically as Silicon Valley believes. Citing AI-driven productivity gains, the head of a company that recently laid off 16% of its workforce made an odd admission. That is tense. Most likely, he is correct about the backlash. However, Snap is also heavily relying on the very technology that he has identified as vulnerable.
As this develops, it’s difficult not to question whether Snap has evolved into a business that sees everything but itself. Spiegel has always been an astute cultural observer. Early on, he saw that teenagers desired something transient, something that didn’t preserve their lives. In that regard, he was correct. Regarding AI, he might be correct. However, it turns out that being right about your stock chart and being right about culture are two different things, and the difference between them has never been greater than it is in Santa Monica at the moment.
If there is a turnaround, it hasn’t materialized yet. According to one Reddit thread, there might not be much of a drawback. It’s more difficult to imagine the upside. Snap is currently in that awkward middle, too real to ignore and too unpredictable to pursue.
