Snap stock surges 13% after announcing Perplexity AI deal, reporting strong revenue

Core Insights - Snap's stock increased by 13% following the announcement of a $400 million deal with Perplexity AI and the release of its third-quarter financial results [1] - The integration of Perplexity's AI-powered search engine into the Snapchat app is a significant development for the company [1] - The partnership is expected to generate revenue starting in 2026, indicating a long-term strategy for alternative revenue streams [2] Financial Performance - Snap reported third-quarter revenue of $1.51 billion, exceeding LSEG estimates of $1.49 billion [2] - The company's daily active users rose by 8% year over year, reaching 477 million, which surpassed StreetAccount's projection of 476 million [3] Strategic Developments - The $400 million deal with Perplexity AI will be executed through a combination of cash and equity over one year [1] - The partnership is seen as a response to large advertisers in the US reducing their advertising spend on the platform, similar to trends observed with Pinterest [2]