Why Snap Stock Topped the Market Today

Artificial intelligence (AI) continues to be a technology of interest for a great many investors, who hope its integration will help power the fundamentals of their portfolio companies higher. That was the dynamic behind Snap (NYSE: SNAP) stock's 3.6% rise on Tuesday, as news of an expanded business partnership with a top tech name involving AI brought market players into the shares. That increase was well higher than that of the S&P 500 index, which posted a marginal gain of 0.3% on the day.

A longtime partnership expands with AI

Before market open, Alphabet's (NASDAQ: GOOG)(NASDAQ: GOOGL) Google Cloud unit announced that it and Snap have expanded their existing strategic partnership to cover AI functionalities for the latter company's My AI chatbot.

Under the terms of the expanded deal, the social media company's foundational Snapchat will leverage Google's latest Gemini AI chatbot technology to enhance My AI's functionality.

Google Cloud wrote that Snap would benefit especially from "the technology's ability to understand and operate across different types of information like text, audio, image, video, and code, to offer more engaging and innovative features for the Snapchat community."

Snap and Alphabet have a relatively long history as partners; Snapchat was launched on Google Cloud in 2011.

Innovation to drive user engagement

Google Cloud did not disclose the financial terms of the expanded relationship between the two partners. It did quote Snap CEO Evan Spiegel as saying that with Gemini as a foundation, "Snapchatters can learn so much more about the world, do it really quickly in the moment, and easily share that with friends."

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.