How Snapchat's Partnership with Perplexity Could Boost the Stock for Years to Come | The Motley Fool

"The $400 million deal helps Snap's Snapchat capitalize on Gen Z while exposing Perplexity to nearly a billion users. Snap is once again looking to differentiate itself from other social media platforms; this time, it's an announced partnership with Perplexity that could do the trick. Snapchat, with its nearly 1 billion users, will embed Perplexity within its app and allow people to ask questions and converse with the artificial intelligence (AI)."

"The integration is expected to launch in early 2026. The hope is that this feature will keep users engaged in the app for longer, enabling increased user retention, profitability, and perhaps even diversifying revenue streams. If Snapchat can roll this new feature out without hiccups and keep AI costs under control, the app has an excellent opportunity to bolster its business for the foreseeable future."

"Snap is still trading near all-time lows, so if the Perplexity integration happens smoothly, the ad revenue driven by an increase in time spent per user could be substantial. In addition to ad revenue, there's potential for brands to sponsor AI answers, offer AI-driven shopping suggestions, and cross-sell or upsell opportunities. Snap could also charge a premium subscription to use the Perplexity feature."

Snapchat will embed Perplexity AI inside the app, allowing users to ask questions and converse with the AI; the integration is expected in early 2026. The $400 million deal gives Perplexity exposure to nearly one billion Snapchat users while helping Snap target Gen Z and younger millennials. The feature aims to increase time spent, improve user retention, and diversify revenue through ads, sponsored AI answers, AI-driven shopping suggestions, cross-selling, and premium subscriptions. Snap trades near all-time lows, so successful rollout and controlled AI costs could materially boost ad revenue and business prospects. Challenges include converting innovation into earnings and a younger user base with less purchasing power.

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