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The three companies were set to add more than $70 billion combined to their market capitalizations. Shares of Alphabet rose 6% in premarket trading, while Reddit jumped 23% and Snapchat-parent Snap climbed 13.4%.
The results also augur well for other ad-reliant companies such as Facebook-parent Meta Platforms, Amazon.com and Pinterest, which gained 1.9% to 2.5%.
“The digital ad market is very strong and I think it continues into the fourth quarter,” said MoffettNathanson analyst Michael Nathanson, adding that Amazon and Meta “should perform well.”
Alphabet, whose strong quarter was also powered by an AI-driven surge in its cloud business, said late on Tuesday that it benefited from election-related ads.
“We had a slight tailwind from election-related ad spend in the third quarter, which was a little bit more pronounced in YouTube ads,” Google business chief Philipp Schindler said.
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Ads-focused peers will likely see similar gains as U.S. political advertising spending is expected to jump by nearly a third in 2024 over the previous U.S. presidential election, with digital media accounting for about 28% of that, a report from Insider Intelligence from earlier this year projected. For Snap, the quarter showed that better-performing ad features were bringing back some marketers to its Snapchat app. The company has leaned on artificial intelligence to sharpen its targeting of ads to users.
Reddit, which turned its first quarterly profit, is also benefiting from AI content licensing deals and moves such as using machine learning for translating its content into other languages to tap new users.
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