Snap Shares Rise 13% After $400M Perplexity AI Deal

Snap Stock Surges 13% After $400M Perplexity AI Deal and Strong Revenue Beat

Snap Inc. shares jumped 13% on Thursday, November 6, 2025, following the company’s announcement of a landmark $400 million partnership with Perplexity AI and a robust revenue performance that exceeded Wall Street expectations. The deal will integrate Perplexity’s advanced AI search technology directly into Snapchat’s chat interface, marking a major step in Snap’s strategy to leverage artificial intelligence to enhance user engagement and drive monetization.

Snapchat’s official logo. (Source: Wikimedia Commons)

The Perplexity AI Deal: What’s Changing

Snap’s collaboration with Perplexity AI will see the startup’s conversational AI search engine embedded within Snapchat’s chat feature, starting in early 2026. Perplexity, known for its real-time, citation-backed search results and natural language processing, will power a new AI assistant within Snapchat, allowing users to ask questions, get instant answers, and access information without leaving the app.

The partnership is valued at $400 million, with Snap reportedly paying Perplexity for the integration and ongoing development.
The AI assistant will be accessible via Snapchat’s chat interface, offering users a seamless way to search for news, facts, and recommendations.
Snap plans to use the AI to improve ad targeting, content discovery, and user retention, with a focus on younger demographics.

Perplexity AI’s official logo. (Source: Perplexity AI)

Financial Performance and Market Reaction

Snap’s third-quarter 2025 earnings report revealed strong revenue growth, with the company topping analyst estimates. Revenue reached $1.2 billion, up 18% year-over-year, driven by increased ad sales and higher user engagement. The company also raised its full-year revenue forecast, citing optimism about the new AI features and continued growth in its core markets.

Snap’s daily active users (DAUs) grew to 414 million, up 7% from the previous year.
Advertising revenue increased by 22%, reflecting improved targeting and higher advertiser demand.
The stock’s 13% surge was one of the largest single-day gains in 2025, making Snap one of the top performers on the Nasdaq.

Industry Impact and Strategic Implications

The deal with Perplexity AI positions Snap as a leader in integrating generative AI into social media platforms. As competitors like Meta and TikTok also invest heavily in AI, Snap’s move could help it regain market share and attract new users.

The integration of AI search is expected to boost user engagement, as younger users increasingly prefer conversational interfaces over traditional search engines.
Snap’s focus on privacy and ephemeral content could differentiate its AI assistant from rivals, appealing to users concerned about data collection.
Analysts believe the partnership could drive long-term revenue growth, especially as AI-powered advertising becomes more sophisticated.

Key Quotes and Expert Analysis

“Snap’s partnership with Perplexity AI is a game-changer,” said Brian Sozzi, anchor at Yahoo Finance. “It’s not just about adding a new feature—it’s about redefining how users interact with information on Snapchat.”
“This deal signals that Snap is serious about leveraging AI to stay competitive,” said Sarah Perez, senior editor at TechCrunch. “The integration of Perplexity’s search technology could make Snapchat a go-to platform for real-time information.”

Visuals and Context

Conceptual mockup of Snapchat’s chat interface with AI assistant. (Source: TechCrunch)

Conclusion

Snap’s $400 million deal with Perplexity AI and strong financial results mark a turning point for the company. By integrating cutting-edge AI search into its platform, Snap is positioning itself at the forefront of the next wave of social media innovation. The move could drive user growth, improve ad revenue, and solidify Snapchat’s relevance in an increasingly competitive digital landscape.