May 4, 2025

Snap Shares Tumble on Tariff Worries 📉

Snap stock plunged up to 16.9% Wednesday after the company warned that looming changes to U.S. trade rules could hurt advertising revenues — even as it posted a 14% increase in total revenue.

🔹 What Happened:

  • Q1 Revenue: $1.36 billion, up 14% YoY
  • Ad Revenue: $1.21 billion, up 9% YoY
  • Q2 Guidance Withdrawn: Due to macro uncertainty

🔹 The Trade Trigger: Snap cited concerns about the end of the de minimis exemption, a rule that lets goods under $800 enter the U.S. duty-free — heavily used by Chinese e-commerce giants like Shein and Temu (who’ve already raised prices by 377% and 150%).

Snap CFO Derek Andersen said:

“We’ve heard from a subset of advertisers that their spending has been impacted by the changes.”

🔹 Market Impact:

  • Snap closed down 12.43% after falling as much as 16.9%
  • Meta fell <1%, Microsoft rose 0.31% and jumped 5%+ after hours

🔹 Analyst Reaction:

“Snap has been pressured more than peers in prior macro downturns,” said BofA’s Justin Post, reiterating a neutral rating despite the stock nearing historical lows.

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