Snapchat’s Stock Surges 16% on Strong Q3 Earnings and $400M Perplexity AI Deal

Snapchat parent Snap Inc. saw shares jump nearly 16% after reporting better-than-expected Q3 results and announcing a $400 million partnership with AI search startup Perplexity. The deal positions Perplexity's conversational AI as the default search tool in Snapchat's chat interface starting in 2026, while maintaining Snap's existing My AI chatbot as an alternative option.

The strategic MOVE signals Snap's broader ambition to transform its platform into an AI hub. "The conversational interface has become a lot more valuable with the advent of conversational AI," said CEO Evan Spiegel. The partnership combines cash and equity components, with revenue recognition expected during the 2026 global rollout.

Perplexity, which boasts over 20 million active users, will maintain control over its AI responses within Snapchat. Notably, the companies confirmed no advertising will appear alongside Perplexity's AI-generated answers, preserving user experience while creating new monetization pathways.