Snap Announces Multiyear Agreement With Qualcomm – Will It Change The Narrative?

• Snap Inc.’s subsidiary Specs will launch a new eyewear product later this year featuring on-device AI and advanced augmented reality (AR) experiences. 
• The deal indicates Snap’s ambitions of moving closer to introducing consumer AR glasses after years of testing.
• The agreement expansion with Qualcomm comes amid a 95% decline in share price over a period of five years.

Shares of Snap Inc (SNAP) are back in focus premarket on Friday after the company’s unit signed a multi-year deal with Qualcomm Technologies. Under the agreement, Snap’s new wearable device will be powered by Qualcomm’s Snapdragon XR solutions.

In this agreement, Specs, Snap Inc.’s subsidiary, will supply the new eyewear, which is expected to launch later this year and will be equipped with a chip designed for augmented and virtual reality devices. As a part of this deal, both companies will develop on-device AI, cutting-edge graphics, and advanced multiuser digital experiences.

"Our work with Qualcomm provides a strong foundation for the future of Specs, bringing developers and consumers advanced technology and performance that pushes the boundaries of what's possible," said Snap CEO Evan Spiegel.

Will AR Pivot Improve Snap’s Momentum?

For a decade, Snap has been working on its AR technology for glasses, and it first launched its product for consumers in 2019. 

Meanwhile, of the 44 analysts on Koyfin, 31 recommend ‘Hold’, seven recommend ‘Buy’, and three recommend ‘Strong Buy.’ One analyst recommends ‘Sell’ while two recommend a ‘Strong Sell’ rating

Earlier this week, Wells Fargo revised its target price for the stock from $8 to $6 and kept an ‘Equal weight’ rating on the shares, according to The Fly. 

How Did Retail Traders React?

As per Stocktwits data, the retail sentiment on the stock has improved from ‘Bearish’ to ‘Neutral’ while message volumes are ‘Normal.’

Over the last five years, shares of Snap have declined by 95%, with more than a third of the losses coming in the year to date.

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