Tech stocks are surging this year and Snap (NYSE:SNAP) is one of them, up 45% thus far in 2023. While it’s still nowhere near the highs of more than $80 it hit in 2021, there’s been much more excitement around Snap this year.
The company has rolled out its own chatbot, dubbed My AI, which can answer questions for users, similar to ChatGPT. Snap like many other companies, has been jumping on the AI bandwagon and hype this year. And whether it’s due to that or just the general rally in tech, it has led to more buying of Snap’s shares.
The momentum has resulted in Snap’s stock making a bullish crossover recently, with its 50-day moving average crossing over its 200-day moving average, indicating a “golden cross.” For technical analysts, that’s an encouraging trend which can lead to more bullishness.
But there are still problems with Snap’s business as it remains deeply unprofitable, with the company regularly incurring quarterly losses of more than $200 million. Sales of $989 million for the first three months of the year were down by 7% year over year.
This week, the company is expected to release its second-quarter results, which will have a big impact in determining where the stock goes from here; whether it gives back some of its gains or if it can continue soaring. Investors should be cautious with Snap’s stock because this can be a volatile investment to be holding on earnings day, and double-digit moves on the release of results aren’t uncommon.