Snap Inc. (SNAP), the company behind Snapchat, is in talks to raise at least $1 billion to support its augmented reality (AR) glasses business. According to a report from tech outlet Sources, CEO Evan Spiegel has been meeting with multiple investors in recent months, including Saudi Arabia’s Public Investment Fund (PIF). Although nothing has been finalized yet, discussions with the PIF are still underway.
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As part of the project, Snap reportedly plans to spin off its AR hardware division, known as Specs, into a separate subsidiary. This move would be similar to how Alphabet operates Waymo, which allows the unit to function independently while still attracting outside investment. Meanwhile, Saudi investor Prince Al Waleed bin Talal Al Saud recently increased his stake in Snap to 2.8% after buying 15.2 million additional shares. His total holdings now amount to 40.8 million shares, which are valued at over $321 million based on Snap’s last closing price of $7.87.
Despite these developments, Snap is facing pressure from analysts. More precisely, research firm Stifel downgraded the stock from Hold to Sell due to concerns that the company will continue to lose market share, which could slow ad revenue growth next year. In fact, five-star analyst Mark Kelley noted that confidence is growing that TikTok will not be banned in the U.S., thereby making it harder for Snap to recover. Stifel also reduced its price target from $8 to $6.50.
Is SNAP Stock a Good Buy?
Overall, analysts have a Hold consensus rating on SNAP stock based on four Buys, 22 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SNAP price target of $9.22 per share implies 15.2% upside potential.
