Snap’s TikTok Rally Is a Bet on Wins That Are Unlikely to Happen

Snap Inc.’s recent rally triggered by a transformation of TikTok’s US operations has investors trading on short-term hopes that are unlikely to materialize as time goes on.

Shares of Snap are up more than 15% in September despite declining 3.6% over the past two sessions. That puts the stock on track for its best month since April 2024, handily beating the broader S&P 500 Index as well as the Solactive Social Media Index, where the company has a 2.8% weighting.

Snap’s short-form video and messaging app Snapchat competes with TikTok and is seen as potentially benefiting from ...