Why Did Snap Inc. (SNAP) Go Down on Friday?

We recently published a list of These 10 Firms Took A Hit on Friday. In this article, we are going to take a look at where Snap Inc. (NYSE:SNAP) stands against other firms that took a hit on Friday.

Wall Street’s main indices all finished in the green territory on Friday, as investors repositioned their portfolios ahead of president-elect Donald Trump’s return to office.

The Dow jumped by 0.78 percent, while the S&P surged by 1 percent. Meanwhile, Nasdaq soared 1.51 percent.

However, ten companies under mixed sectors bucked an overall positive market sentiment as multiple negative factors put pressure on investor sentiment. In this article, let’s look at the reasons that dragged their shares performance.

To come up with the top 10 losers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A young adult family using a Camera to record moments of their daily life.

Snap Inc. (NYSE:SNAP)

Snap Inc. (NYSE:SNAP), operator of Snapchat, dropped its share prices for a second day on Friday, losing 3.25 percent to finish at $10.86 apiece as investors sold off positions following news that the Federal Trade Commission (FTC) is set to refer a complaint against the company to the Department of Justice over allegations that Snapchat’s My AI chatbot used an artificial intelligence that “poses risks and harms to young users.”

A representative from Snap debunked the claims, saying that its MyAI incorporates “rigorous safety and privacy processes” and that the FTC’s complaint “lacks concrete evidence.”

The FTC said that its probe “uncovered reason to believe Snap (NYSE:SNAP) is violating or is about to violate the law.”

In other news, investors seem to be on the sidelines looking for cues on TikTok’s decision about its US operations following the Supreme Court’s decision to uphold a law that would require the company to either sell its US operations to an American firm or face a ban. Snap stands to benefit from a potential TikTok exit, with the latter being one of its largest competitors.

Overall, SNAP ranks 9th on our list of firms that took a hit on Friday. While we acknowledge the potential of SNAP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as SNAP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.