Snap Inc. operates as a technology company in North America, Europe, and internationally. The company offers Snapchat, a visual messaging application with various tabs, such as camera, visual messaging, snap map, stories, and spotlight that enable people to communicate visually through short videos and snaps. It also provides Snapchat+, Lens+, and Snapchat Platinum, a subscription service that provides subscribers access to exclusive, experimental, and pre-release features; Spectacles, an augmented reality (AR) glasses; and advertising products, including AR ads and Snap ads comprises a single image or video ads, collection ads, dynamic ads, story ads, commercials, sponsored snaps, and promoted places. In addition, the company offers campaign management and delivery, an advertising platform that provides automated, sophisticated, and scalable ad buying and campaign management; and measuring advertising effectiveness solutions. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California.
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Meta to Pay $16.7 Billion to Settle Social Media Harm to Children Lawsuit
Meta has reached an agreement with attorneys general from 29 U.S. states to settle lawsuits alleging that Facebook and Instagram made children addicted to social media and harmed their mental health. Meta agreed to pay up to $16.7 billion and to implement additional child protection measures, such as daily time limits, nighttime blocking, age verification, and parental tools. California could receive up to $2.1 billion, while Texas has a separate $1 billion settlement. Some states report a total value of $17.1 billion, including $459 million from the Cambridge Analytica case. Meta states the total payout is approximately $18 billion, paid annually over 10 years. Participating states will receive $12.7 billion, or 70%, with the remaining $5.3 billion contingent on YouTube and TikTok adopting similar measures. Meta will record a $10 billion expense in the third quarter of 2026 after the agreement. Meta shares rose 1%, while Snap fell 8%.
Meta settlement puts social media industry on notice
California Attorney General Rob Bonta said the trial, which was in its second week, "did not go well for Meta," after the company reached a historic settlement with dozens of US states over allegations that it designed Instagram and Facebook to hook minors. The settlement, which includes a $17 billion fine, is expected to be implemented over the coming months, and Bonta warned that Meta could be held in contempt of court if it violates the terms. The deal also pressures TikTok, YouTube, and Snap, referred to as "Core Industry Members," to make similar changes to their apps for teens, with Meta's Chief Legal Officer C.J. Mahoney saying the framework will only work if all peers join. Hawaii Attorney General Anne Lopez expressed hope that these companies will "read the writing on the wall" and enter into similar settlements, while experts say the deal sets a precedent that could lead to more legal actions and product changes across the industry. Meta's shares rose 1 percent on Wednesday, and the company, along with YouTube, was earlier found liable in a Los Angeles case and ordered to pay $6 million to a young woman, a decision they intend to appeal.
Meta Settles Teen Safety Suit for $17B; Snap Falls 9%
Meta Platforms agreed to a proposed multistate teen-safety settlement worth up to $17 billion, ending a federal trial that began days ago in Oakland, and its stock rose 1% to $575.60 at midday Wednesday. The settlement resolves allegations that Facebook and Instagram were designed to encourage compulsive use among children and teens, with payments running in annual installments over 10 years and California potentially receiving $1.5 billion to $2.1 billion. Participating states receive 70% of the allocated payment, while the remaining 30%, or $5.3 billion, is released only if YouTube and TikTok implement the same age assurance measures and match that amount. The $17 billion deal is a fraction of the $1.4 trillion in damages Meta said four states could seek, and Meta had booked a $2.4 billion charge related to legal proceedings in Q2 2026. Meanwhile, Snap stock fell 9% to $5.42 after Pennsylvania Attorney General Dave Sunday sued Snapchat over compulsive-use design and risks to minors, and Reddit slid 3% to $156.78 in sympathy, while the Global X Social Media ETF declined 0.7% to $45.28.
Meta's $16.7B Settlement Sets Precedent for Social Media Sector
Meta has reached a settlement in its social media trial, agreeing to pay up to $16.7 billion, according to Reuters. Bloomberg Intelligence's Mandeep Singh says the payout is not a huge dent for Meta, which generates over $40 billion in free cash flow, but it sets a precedent that could impact the entire social media sector. The settlement may force platforms to change how algorithms show feeds to users under 16, potentially affecting ad impressions and growth. While giants like Alphabet can absorb such costs, smaller platforms like Snapchat and Roblox, which cater to younger demographics, could face a bigger blow. Singh warns that user growth is likely to saturate across social media, and engagement growth could be negatively impacted if remedies are required.
Snap Trades 57% Below High Despite Strong Cash Generation
Snap, the parent company of Snapchat, is trading about 57% below its two-year high while generating free cash flow at nearly double the rate of the median S&P 500 company. Over the last twelve months, the company produced $0.71 billion in free cash flow, giving it a free cash flow yield of 7.7% compared with the S&P 500 median of 4.2%. Revenue grew 12.6% over the past year, with the most recent quarter up 19% year-over-year, driven by a recovering advertising business and an 85% jump in other revenue led by the Snapchat+ subscription. Management has said free cash flow per share will be its primary financial objective going forward. The market's discount reflects skepticism about Snap's multi-year investment in Specs augmented reality glasses, which carry a $2,195 per-device price and face competition from larger rivals, with mass market adoption not expected until the end of the decade.
Alphabet Leads Consumer Internet Q2 Earnings with 24.2% Revenue Growth
Alphabet reported second-quarter revenues of $119.8 billion, up 24.2% year over year, beating analysts' expectations by 2.2% and posting a solid EPS beat. Among the 44 consumer internet stocks tracked, the group's revenues beat consensus estimates by 1.3% while next quarter's revenue guidance came in 3% below. Reddit delivered the biggest analyst estimate beat, highest guidance raise, and fastest revenue growth of the whole group, with revenues of $804.9 million, up 61.1% year over year, but its stock fell 13.8% since reporting. Coinbase was the weakest performer, with revenues of $1.22 billion, down 18.5% year over year and missing analysts' expectations by 5.9%, yet its stock rose 15.6% since the results. Bumble reported revenues of $210.5 million, down 15.2% year over year, in line with expectations but with a significant miss on next quarter's revenue guidance, while Snap's revenues of $1.60 billion, up 18.9% year over year, beat expectations by 3.8%.
Meta Platforms reported second-quarter 2026 advertising revenue of $59.4 billion, up 27% year over year, driven by AI-powered ad tools and strong user engagement across its family of apps. Ad impressions rose 14% and average price per ad increased 12%, while daily active users reached 3.6 billion. The company's Advantage+ AI advertising solutions surpassed a $75 billion annual revenue run rate, and more than 9 million small businesses now use at least one of Meta's AI-powered ad creative tools. Meta expects third-quarter 2026 revenue between $61 billion and $64 billion. Competitors Reddit and Snap also reported ad revenue growth in the same quarter, with Reddit up 64% to $762 million and Snap up 9% to $1.28 billion.
Snap Drops 3% After Ninth Circuit Strips Its Section 230 Immunity
Snap shares fell 3% to $5.24 Monday midday after a federal appeals court ruling stripped the company's Section 230 immunity, opening the door to more than 3,000 consolidated lawsuits. The Ninth Circuit's August 10 decision rejected the legal shield that has historically protected social media platforms from liability over user-generated content, and the ruling sent Snap stock down as much as 12% overnight to $4.74 before buyers stepped in. The lawsuits, brought by states, municipalities, school districts and families, allege Snapchat was deliberately designed to maximize engagement among minors. The legal overhang overshadowed Snap's Q2 2026 revenue beat of $1.6 billion, up 18.9% year over year, and adjusted EBITDA of $249.62 million versus $41.27 million a year earlier. Peers also fell, with Meta Platforms down 3% to $573.9, Reddit down 3% to $173.45, and Pinterest down 4% to $23.2, while the Global X Social Media ETF slipped 1% to $46.11.
Meta Faces Rising Australia Enforcement Risk Over Under-16 Ban
Meta Platforms edged about 0.3% higher Friday morning as Australia's under-16 social-media ban intensified scrutiny of its age-verification systems. The company deactivated 462,000 suspected underage Instagram accounts and 294,000 Facebook accounts between December and June, yet government figures show more than eight in 10 users under 16 remained active on social media in the ban's first three months. Australia is moving to double the maximum noncompliance penalty to A$99 million and give regulators more power to gather evidence, while Meta, Google, TikTok and Snap representatives were scheduled to face a parliamentary inquiry Friday. For investors, the bigger concern is whether Australia becomes a regulatory playbook for other countries, potentially raising compliance costs and pressuring engagement among younger users. GuruFocus data as of Aug. 14 values Meta at $597.81 against a GF Value estimate of $836.91, leaving the stock 28.57% below GF Value.
Appeals Court Clears Path for Thousands of Social Media Addiction Lawsuits
A federal appeals court removed a procedural obstacle facing more than 3,000 lawsuits accusing Meta Platforms, Snap, Alphabet, and TikTok of harming young users through allegedly addictive product features. The Ninth Circuit ruled that Section 230 provides a defense against liability, not immunity from being sued, making Meta and TikTok's appeal premature. The ruling does not decide liability but allows the cases to proceed, with a trial involving 29 state attorneys general scheduled to begin on August 12. Meta faces a combined $942 million in ordered penalties and abatement funding from New Mexico, which it plans to appeal, making the final amount and timing uncertain. The litigation includes approximately 3,300 additional California state cases, and the first bellwether verdict awarded $6 million against Meta and Google.
Social media companies urge Australia not to over-rely on data on under-16 usage
Major social media companies on the 14th urged the Australian government not to place excessive weight on early data showing that many children are still using their services after the ban on under-16s. Appearing before an Australian Senate hearing were local heads of Google, which operates YouTube, Meta, which operates Facebook and Instagram, Snapchat, and the Chinese short-video app TikTok. Lawmakers cited findings from Australia's internet regulator and others showing that around 80 percent of under-16s were still using social media several months after the ban took effect last December, and asked the companies to explain. Australia's internet regulator, the eSafety Commission, has accused some social media platforms of deliberately delaying compliance and is considering legal action. The hearing is examining proposed amendments that would double the maximum fine to 99 million Australian dollars, or 64 million US dollars, and expand the eSafety Commission's powers to compel platforms and third-party age-verification service providers to produce information and documents during investigations. YouTube's head of government affairs, Rachel Lord, noted that the latest government-published data was as of March, and cautioned against over-reliance on data that is still at a very early stage. Meta's head of public policy for Australia, Mia Garlick, said the data in question may not reflect whether under-16s who claimed to be using the platforms actually held accounts, and that survey data can show a gap between self-reporting and actual behaviour.
Meta Removes 756,000 Suspected Underage Accounts in Australia
Meta Platforms removed 756,000 suspected underage accounts from just before Australia's December ban through June, including 462,000 on Instagram and 294,000 on Facebook, according to Reuters. The removals come as Australia enforces a ban on social-media accounts for anyone under 16, forcing platforms to verify user ages. Meta is using artificial intelligence to read signals from profile activity, reported accounts, and other behavioral clues, while also targeting users who try to sign up again after being removed. Representatives from Meta, TikTok, YouTube, and Snapchat face a parliamentary inquiry on Friday. Australia is moving to double the maximum noncompliance penalty to A$99 million, roughly $69.8 million.
Reddit is strengthening its advertising position against Meta Platforms and Snap, driven by robust financial and user growth. In the second quarter of 2026, Reddit achieved its eighth consecutive quarter of more than 60% revenue growth, with advertising revenues rising 64% year over year to $762 million. The platform now reaches more than 0.5 billion people weekly, including more than 130 million daily users, and new app user retention improved 50% year over year. Reddit's AI-driven ad suite, Reddit Max, saw advertiser usage grow more than 60% from the first quarter, with revenues from Max campaigns increasing by more than 150%. For the third quarter of 2026, management expects revenues between $860 million and $870 million, representing 47% to 49% year-over-year growth.
Snap Q2 Earnings Beat Estimates on Ad Momentum and AI Tools
Snap reported second-quarter revenue of $1.60 billion, beating analyst estimates of $1.54 billion and marking 18.9% year-on-year growth. Adjusted EPS came in at $0.13, significantly above the $0.06 consensus, while adjusted EBITDA reached $249.6 million versus expectations of $185.3 million. CEO Evan Spiegel attributed the performance to a 56% year-on-year increase in conversion events driven by ad platform automation and AI-powered tools, along with strong adoption of new ad formats and robust growth among small and medium-sized business advertisers. During the earnings call, analysts questioned the durability of growth, investment pacing for Specs, North America user trends, and the financial rationale for Specs investment, with management highlighting disciplined investment and ongoing monitoring of regulatory risks. The company also noted that World Cup-related ad spending benefited the quarter but is expected to normalize in Q3.
Snap CEO Says Fewer Than 3% of Users Pay for Subscriptions, Sees Room to Grow
Snap CEO Evan Spiegel said fewer than 3% of the company's monthly active users currently pay for subscriptions, calling it an early stage with substantial room to increase penetration. During an earnings call, Spiegel noted that app-based subscription services across the industry typically achieve 7% to 12% user penetration over the long term. He highlighted newly launched AI-powered features like Lens+ as a major growth driver and said subscription products including Snapchat+, Memories Storage, and Lens+ helped drive an 85% year-over-year increase in other revenue to $316 million in the second quarter. Snap beat Wall Street's second-quarter expectations with an adjusted loss of 10 cents per share on $1.6 billion in revenue and issued a stronger-than-expected third-quarter outlook forecasting $1.70 billion to $1.74 billion in revenue and adjusted EBITDA of $300 million to $350 million.
Snap shares surge 14% after second quarter revenue and outlook beat estimates
Snap Inc shares surged 14% after the social media company reported second quarter revenue of $1.60 billion, above the $1.54 billion analyst consensus, and provided an upbeat third quarter outlook. The net loss of $0.10 per share was narrower than the expected $0.12 loss, with advertising revenue growth accelerating to 9% year over year from 3% in the first quarter. Daily active users reached 493 million, exceeding the 488 million forecast, while North American daily active users stabilized sequentially after two quarters of decline. For the third quarter, Snap guided for revenue growth of 13% to 15% year over year, with the midpoint ahead of Wall Street's 13% estimate. Jefferies analysts reiterated a Buy rating and raised the price target to $6 from $5.50, citing the stronger results and outlook, though they noted that sustained momentum in the second half is important for a meaningful re-rating of the stock.
Snap stock jumps 6% on improved advertising and World Cup boost
Snap shares surged 6% in premarket trading after the company reported second-quarter revenue above expectations and a narrower loss per share. Quarterly revenue rose 18% year over year to $1.6 billion, beating the $1.53 billion consensus, while the loss per share came in at $0.10 versus the $0.12 Wall Street had forecast. CEO Evan Spiegel cited better momentum with large North American advertisers, stronger international revenue growth, and a contribution from World Cup-related spending. The company also highlighted that Snapchat is approaching 1 billion monthly users, with Spotlight daily active users growing more than 20% and the number of people posting to Spotlight up more than 115% year over year. Despite the premarket gain, Snap shares remain down more than 38% year to date and roughly 93% from their 2021 all-time high near $75.
McDonald's, Caterpillar, Palantir lead premarket moves on earnings beats
Several major companies saw significant premarket stock moves following their latest quarterly earnings reports. McDonald's gained 1.9% after posting adjusted earnings of $3.38 per share, beating the LSEG consensus of $3.32, though revenue of $7.1 billion missed the expected $7.13 billion. Caterpillar climbed 8% after reporting adjusted earnings of $8.17 per share on revenue of $20.54 billion, both exceeding analyst expectations of $6.20 per share and $19.34 billion. Palantir Technologies surged 15% on second-quarter results driven by a nearly 150% jump in U.S. commercial revenue. Merck rose more than 1% after losing an adjusted 13 cents per share on revenue of $16.61 billion, better than the anticipated loss of 27 cents per share on $16.36 billion, and raised its full-year revenue guidance. Pfizer gained after beating estimates with adjusted earnings of 77 cents per share on revenue of $15.03 billion and increasing the low end of its full-year revenue outlook. On Semiconductor jumped 7% on better-than-expected second-quarter results and margins. Snap rose 5% after revenue of $1.6 billion topped the $1.54 billion estimate, with global daily active users and average revenue per user also exceeding expectations. Whirlpool was little changed after a larger-than-expected adjusted loss of 21 cents per share and a lowered full-year earnings forecast. Wayfair fell 4% despite beating estimates with earnings of 95 cents per share on revenue of $3.52 billion. DigitalOcean plunged 11% even though second-quarter earnings of 45 cents per share on revenue of $281 million surpassed analyst expectations.
AI-linked chip stocks rebound while Powell Industries tumbles premarket
U.S. stock index futures rose on Tuesday as semiconductor shares found support from another round of upbeat AI-related earnings. ON Semiconductor rose more than 7% after reporting second-quarter adjusted earnings of $0.74 per share on revenue of $1.60 billion, both ahead of Wall Street forecasts, reinforcing expectations that artificial intelligence infrastructure spending remains resilient. Ameresco surged 29.9% after beating second-quarter revenue expectations and raising its full-year earnings outlook, while Snap jumped nearly 9% following a broad earnings beat. Powell Industries tumbled 14.0% after missing Wall Street expectations on both earnings and revenue for a second consecutive quarter, despite record new orders and a sharply expanded backlog.
Palantir, Snap, and ON Semiconductor lead Tuesday's biggest stock movers
Palantir Technologies, Snap, and ON Semiconductor were among the biggest stock gainers on Tuesday, while Powell Industries led the losers. Palantir shares surged 15% after crushing second-quarter results and raising its full-year outlook, with revenue jumping 93% year-over-year to $1.94 billion and its fiscal 2026 revenue forecast lifted to $8.15 billion to $8.16 billion. Snap gained 9% on better-than-expected second-quarter earnings, 19% revenue growth to $1.6 billion, and daily active users reaching 493 million. ON Semiconductor climbed 7% after issuing stronger-than-expected third-quarter guidance, forecasting revenue of $1.65 billion to $1.75 billion and adjusted earnings per share of $0.81 to $0.93. Powell Industries fell 14% despite a 158% surge in new orders to $934 million, as its quarterly revenue of $312 million and earnings per share of $1.42 missed estimates.
Snap CEO Says $2,195 AR Spectacles Won't Reach Mass Market Until End of Decade
Snap CEO Evan Spiegel said the company's $2,195 AI-powered Spectacles are unlikely to see mass-market adoption before the end of the decade. Speaking on the second-quarter earnings call, Spiegel announced plans to unveil the augmented reality glasses at a September 16 event ahead of a commercial launch later this year, describing the device as a first-mover opportunity in a new computing category where AI does more work and people spend less time operating screens. Snap reported a second-quarter adjusted loss of 10 cents per share, beating Wall Street estimates for a loss of 12 cents, while revenue rose 19% year over year to $1.6 billion, topping analysts' expectations of $1.54 billion. The company guided third-quarter revenue to between $1.70 billion and $1.74 billion, above the $1.69 billion consensus, with adjusted EBITDA expected in the range of $300 million to $350 million. Shares closed 7.46% higher at $5.04 and rose another 7.17% in extended trading following the earnings release.
Chuanzhi Education hits 7th straight daily limit as AI application plays strengthen
On August 4, AI application plays repeatedly strengthened, with Chuanzhi Education recording its 7th consecutive daily limit, Hengyin Technology its 3rd straight daily limit, and Mio Exhibition surging over 10%. In news, US AI application concept stocks Palantir and Snap both beat earnings expectations, sending their shares up over 14% each in after-hours trading at one point. Chuanzhi Education reported first-quarter 2026 revenue of 104 million yuan, up 43.75% year-on-year, and net profit attributable to the parent of 1.4579 million yuan, achieving a single-quarter turnaround from loss. It expects first-half 2026 net profit of 28 million to 40 million yuan, representing year-on-year growth of 488.72% to 655.32%.
Reddit Plunges 24% on Traffic Warning While Alphabet Gains 5%
Reddit cratered 24% despite beating Q2 estimates with $805 million in revenue, while Alphabet gained 5% in the same session. Reddit CEO Steve Huffman warned that Google search referrals turned choppy, overshadowing a beat-and-raise quarter that included earnings per share of $1.25 and a raised third-quarter revenue outlook of $860 million to $870 million. The sell-off left Meta Platforms roughly flat and Snap down just 2%, highlighting a divergence between AI infrastructure winners and content platforms dependent on search traffic. Reddit also disclosed no new AI data-licensing deal, disappointing investors who had hoped for another agreement alongside existing pacts with OpenAI and Google.
Social Media Victims Law Center Files Wrongful Death Lawsuit Against Meta, TikTok, Snap, and Google
The Social Media Victims Law Center has filed a wrongful death lawsuit against Meta, TikTok, Snap, and Google, alleging the companies targeted minors and hid evidence as child deaths mounted. The complaint, filed in Delaware Superior Court on behalf of four families from Texas, North Carolina, Minnesota, and Tennessee, claims the platforms ignored internal warnings, concealed harm, and used algorithms to push harmful content to children, leading to the deaths of four teens between July 2024 and September 2025. The lawsuit draws on newly unsealed documents showing the companies tracked minors' vulnerabilities and promoted diet ads, beauty filters, and social comparison features that worsened anxiety, depression, and suicidal ideation. The four children—Olivia Castro, 13; Nathaniel Chambers, 17; Dawson Holden, 18; and Rivers Kelleher, 14—died by asphyxiation or gunshot wound after years of escalating social media use. Founding attorney Matthew P. Bergman stated the deaths are a consequence of a decade of misconduct that has created a national youth mental health crisis.
US FTC Sues Telehealth Firm Hims & Hers Over Sharing Health Data with Advertisers
The US Federal Trade Commission sued telehealth company Hims & Hers Health on the 29th, alleging it provided users' health data to online advertising companies such as Meta Platforms and Snap, and engaged in improper billing and cancellation practices. The company is one of the major telehealth providers in the weight-loss drug market, also offering treatments for erectile dysfunction and hair loss. Christopher Mufarrige, head of the FTC's consumer protection bureau, said in a statement that the agency is acting to protect consumers' rights. Hims & Hers pushed back in a post on X, calling the lawsuit baseless.
France passes law banning children under 15 from using social media
The French parliament has passed a law banning children under the age of 15 from opening social media accounts, with approval from both the Senate and the National Assembly on Tuesday, July 21. The law will take effect from September 1, and social media platforms will have an additional four months to close accounts of users below the age threshold. They must also implement an age verification system certified by France's personal data regulator. France becomes the first country in Europe to enact such legislation, following Australia, which began enforcing a ban on users under 16 from platforms like Facebook, Snapchat, TikTok, and YouTube last December. Meanwhile, the European Commission is in the process of drafting regulations to govern social media use across the European Union and will assess whether the French law aligns with EU legislation.
Snap settles minor addiction case as Meta faces jury trial next week
Snap has reached a tentative settlement in the second case scheduled for trial over allegations that major social media platforms are addictive to minors, leaving Meta as the only remaining defendant expected to face a jury when the trial begins next week in Los Angeles. Terms of the proposed settlement were not disclosed. Google's YouTube and TikTok had previously reached agreements with the plaintiff, identified as R.K.C. The legal proceedings are part of more than 3,000 individual complaints filed against the four platforms by users or their families, alleging that their products are addictive and have caused harm. The cases come amid increasing policy scrutiny of children's access to social media, with Australia introducing a ban in 2025 preventing users under 16 from accessing social media and at least a dozen other countries considering similar measures.
Snap Inc. has unveiled SPECS, a standalone augmented reality glasses priced at US$2,195, with shipments planned for the US, UK, and France starting in fall 2026, and has scheduled its second-quarter 2026 earnings call for August 3, 2026. The launch marks a shift from AR as an in-app feature to dedicated hardware, tying into bullish catalysts around AR monetization while amplifying risks that heavy spending could pressure margins if uptake disappoints. The company's narrative projects US$8.1 billion in revenue and US$402.1 million in earnings by 2029, with a fair value estimate of US$7.58 per share, implying a 62% upside. However, the lowest analyst forecasts model only about 6.2% annual revenue growth and no profitability within three years, highlighting persistent concerns about ad platform execution and unprofitability.
Benchmark Maintains Hold Rating on Snap Inc Despite SPECS Release
Benchmark reiterated a Hold rating on Snap Inc following the release of its augmented reality glasses, SPECS. The glasses are priced at $2,195 for pre-order, with shipping to the US, UK, and France starting in fall 2026. Analyst Mark Zgutowicz noted the price came in below Benchmark's prior $2,500 estimate, but highlighted that Snap has not yet disclosed key performance details such as resolution, pixels per degree, brightness, and refresh rate, making it difficult to fully evaluate display quality versus competitors.
Australia accuses big tech of failing to block under-16 users
Australia has accused major social media platforms of failing to comply with its world-first law banning access for users under 16. The eSafety Commission found that seven out of 10 children under 16 still had access to social media, with only Australia-based Kick refusing an account attempt without proof of age. Prime Minister Anthony Albanese said big tech is not doing enough, while Communications Minister Anika Wells accused platforms of doing the bare minimum. In response, the government will double the maximum fine for violations to 99 million Australian dollars and compel companies to provide proof of compliance steps.
Snap faces lawsuit alleging Snapchat enabled grooming of minors
A major lawsuit has been filed against Snap Inc. alleging that Snapchat's design and recommendation systems enabled grooming and abuse of minors. The case follows renewed scrutiny after a dark web manual surfaced that explicitly targets Snapchat features for child exploitation. The allegations focus on user safety, product design choices, and how Snapchat's algorithms connect users on the platform. The filing raises new questions about Snap's regulatory risk and potential exposure to tighter oversight and legal liability. Snap shares recently closed at $4.84, down 20.3% over the past 30 days and 40.5% year to date.
Reddit Leads Social Media Stocks in 2026 Despite 14% Year-to-Date Decline
Reddit leads the 2026 year-to-date scoreboard among social media stocks, down just 14%, narrowly ahead of Pinterest which is down 15%, while Snap has collapsed 41%. Reddit's first-quarter earnings per share of $1.01 nearly doubled the consensus estimate of $0.56, with ad revenue surging 74% year over year. The House passage of the KIDS Act threatens sector-wide compliance costs, with Reddit's 40% EBITDA margin offering the most cushion and Snap the least. Pinterest posted solid first-quarter results with revenue crossing $1.01 billion and monthly active users reaching a record 631 million, while Snap barely beat on revenue and swung to a net loss with North American daily active users falling 7%. All three stocks remain in the red for the year, and the next major data points will be second-quarter earnings reports.
House Passes KIDS Act for Online Safety, Senate Seeks Stricter Rules
The House passed the KIDS Act on Monday, requiring online platforms to limit minors' access to sexual material and provide parental controls, but the measure faces pushback from senators demanding a legal duty of care for tech companies. The bill, approved 267-117, mandates age verification for pornography sites, default safety settings for minors on social media, and disclosures from AI chatbots. Senators argue the House version is inadequate without holding companies like Meta, TikTok, and Snap legally accountable for harmful content. The Senate is advancing a broader proposal that includes a duty of care provision and preemption of state AI laws, with negotiations expected once the Senate passes its own bill.
Snap identified as unprofitable stock with potential, while Ducommun and Strategy face challenges
StockStory highlights Snap as an unprofitable company with the potential to become an industry leader, while recommending caution on Ducommun and Strategy. Snap, trading at $4.41 per share, has a trailing 12-month GAAP operating margin of negative 6.8% but a healthy EBITDA margin of 11.9%, and its free cash flow margin increased by 8.8 percentage points over the last few years. Ducommun, at $177.22 per share, saw its backlog drop 16% on average over the past two years and its operating margin fall by 11.2 percentage points over five years. Strategy, at $82.82 per share, has a trailing 12-month GAAP operating margin of negative 2,853%, with its core analytics software eclipsed by its Bitcoin strategy and debt-financed Bitcoin purchases tying shareholder fortunes to crypto swings.
Australia to double fines for social media platforms over child account ban
Australia plans to double the fines for social media platforms that fail to prevent children under 16 from holding accounts. Communications Minister Anika Wells said the government will introduce legislation this week to increase the maximum penalty for non-compliant platforms to A$99 million from A$49.5 million, arguing that technology companies have not adequately enforced the restrictions that took effect on December 10. The eSafety Commissioner will gain expanded powers to compel platforms to provide evidence of their compliance steps. Children under 16 have been barred from 10 major social media platforms in Australia since late 2025, but many continue to access the restricted services. The eSafety Commissioner has opened investigations into the alleged non-compliance of Meta's Facebook and Instagram, Snap's Snapchat, TikTok, and Alphabet's YouTube.
Meta Platforms revenue dwarfs Snap's as AI spending fuels growth
Meta Platforms reported first-quarter 2026 revenue of $56.3 billion, a 33% year-over-year increase, while Snap posted $1.5 billion, up 12%, highlighting a widening gap between the two social media companies. Meta's net income margin reached 48% for the quarter ended March 31, 2026, compared to Snap's negative 6% margin. Meta attributed its revenue growth to artificial intelligence investments and raised its 2026 capital expenditure forecast to as high as $145 billion, up from $72 billion in 2025. Snap, which has yet to achieve profitability since going public in 2017, saw its stock hit a 52-week low of $3.81 this year amid ongoing struggles.
Snap faces major lawsuit over child safety and online grooming risks
A major lawsuit has been filed against Snap Inc. alleging that Snapchat's product design enabled a predator to groom and assault a minor. The case focuses on features such as disappearing messages, Quick Add, Bitmoji avatars, and location sharing, which are claimed to have increased child safety risks. The suit highlights broader law enforcement concerns about Snapchat's role in global online grooming cases and raises new legal and reputational questions for the company. Snap's stock has already been under strain, recently trading at $4.34, down 24.5% over the past month and 46.6% year to date. The lawsuit could influence how platforms structure features tied to anonymity, discovery, and location, and how investors assess risk around user safety for social media companies.
Snap launches $2,200 AR glasses amid business struggles
Snap has introduced its first standalone augmented reality glasses, Specs, priced at $2,200, as the company faces financial headwinds and skepticism about the product's viability. The glasses feature a 51-degree field of view, advanced nanostructure waveguides, and an integrated multimodal AI assistant through partnerships with OpenAI and Google. Snap CEO Evan Spiegel positioned the device as a smartphone replacement, but critics point to a four-hour battery life and a bulky design that falls short of everyday eyewear. The launch comes as Snap reported a net loss in Q1, with daily active users growing just 5% year-over-year, and after the company cut 16% of its workforce and saw its CFO depart. Snap has burned about $3 billion on hardware over 11 years, and the company carries $3.5 billion in debt against $2.8 billion in cash.
Snap shares rise 1.57% to $4.53, outperforming the S&P 500
Snap Inc. closed at $4.53 in the latest trading session, a 1.57% gain that outpaced the S&P 500's 0.1% decline. The company behind Snapchat is forecast to report earnings per share of $0.07 for the upcoming quarter, an 800% increase from the prior-year period, with revenue expected to reach $1.53 billion, up 13.99%. Full-year consensus estimates stand at $0.60 per share on revenue of $6.7 billion, representing year-over-year growth of 81.82% and 12.91%, respectively. Snap currently trades at a forward price-to-earnings ratio of 7.5, a discount to the industry average of 17.83, and carries a Zacks Rank of 3, or Hold.
Google settles YouTube addiction lawsuit brought by Florida teenager
Google has settled a lawsuit brought by a 16-year-old Florida boy who alleged YouTube contributed to his social media addiction and mental health problems. The terms of the settlement are confidential, while TikTok, Snapchat, and Instagram remain set for trial in July. The case is part of a wave of roughly 5,900 lawsuits in California courts accusing social media companies of designing harmful, addictive products for young people. A prior landmark case ended in March with a jury finding YouTube and Instagram negligent, ordering Meta to pay $4.2 million and Google $1.8 million in damages. Nearly every US state has also filed similar lawsuits, and New Mexico recently won a $375 million judgment against Meta.