Snap shares jumped on Tuesday on reports that the company has struck a deal to allow users to buy Amazon (AMZN) products directly from Snapchat. The deal for Snap (SNAP) follows a similar agreement between Amazon and Facebook parent Meta (META).
The deal will allow Snap users to buy Amazon products they see advertised on Snapchat directly through the app. The deal was first reported by The Information late Monday.
Snap shares climbed 7.5% to close at 12.15pm on the stock market today.
Amazon links up with Snap, Meta
Snap users will be able to see real-time pricing, Prime eligibility, delivery estimates and product details on select Amazon product ads within Snapchat.
“For the first time, customers will be able to shop Amazon’s Snapchat ads and check out with Amazon without leaving the social media app,” an Amazon spokesperson said in an email. “In-app shopping with Amazon is available for select products advertised on Snapchat and sold by Amazon or by independent sellers in Amazon’s store.”
Snap did not immediately respond to a request for comment on Tuesday.
The deal is similar to one between Amazon and Snap’s larger rival, Meta. Users of Meta’s Instagram and Facebook will also be able to shop directly from Amazon on each app after linking their accounts.
Amazon also has an advertising partnership with Pinterest (PINS).
For Amazon, the tie-ups come as TikTok invests heavily in building a US e-commerce business powered by its social media network.
Amazon shares rose 2.3% to close at 145.80 on Tuesday.
Snap stock: Sales bounce back
Snap, meanwhile, is coming off its first quarter of the year with year-over-year revenue growth. The company reported a 5% increase in revenue for the third quarter in an earnings report released on 24 October.
Chief executive Evan Spiegel said in a letter to shareholders that Snap’s revenue rebound was helped by the company’s work to “cultivate new revenue streams to diversify our revenue growth and build a more resilient business.”
At the start of trading on Tuesday, Snap shares were up 23% since the earnings report, before the boost from the Amazon deal.
Still, the company has a weak IBD Composite Rating of 67 out of 99, according to IBD Stock Checkup. In addition, the stock has an EPS rating of 15 out of 99, suggesting meagre earnings growth.
