Snap stock jumped Tuesday on reports the company has a deal to allow users to directly purchase Amazon products on Snapchat. The deal for Snap follows a similar agreement between Amazon and Facebook parent Meta.
The agreement will allow Snap users to buy Amazon products they see advertised on Snapchat directly through the app. The arrangement was first reported late Monday by The Information.
Snap stock climbed 7.5% to close at 12.15 in 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 could not immediately be reached for comment Tuesday.
The deal is similar to one struck between Amazon and Snap's larger rival, Meta. Users on Meta's Instagram and Facebook will also be able to shop Amazon directly on each app after linking their accounts.
Amazon also has an advertising partnership with Pinterest.
For Amazon, the tie-ups come as TikTok is investing heavily in developing a U.S. e-commerce business, powered by its social media network.
Amazon stock climbed 2.3% to close at 145.80 on Tuesday.
Snap Stock: Sales Bouncing Back
Snap, meanwhile, is coming off its first quarter this year with year-over-year sales growth. The company reported a 5% revenue increase for the third-quarter, in an earnings report published Oct. 24.
Chief Executive Evan Spiegel said in a shareholder letter that Snap's sales rebound was helped by the company's work "cultivating new sources of revenue to diversify our top-line growth to build a more resilient business."
Entering trading Tuesday, Snap shares had climbed 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. Further, shares have an EPS Rating of 15 out of 99, indicating meager earnings growth.
