Snap Inc. (NYSE:SNAP) will focus on enhancing its advertising business and augmented reality offerings, CEO Evan Spiegel told employees on Tuesday.

What Happened: The announcement comes as Snap faces stiff competition from major social media platforms like Mark Zuckerberg's Meta Platforms Inc. (NASDAQ:META) and Bytedance's TikTok for ad revenue. Spiegel noted that despite progress, Snap's ad business is growing slower than its competitors, Reuters reported.

In early August, Snap provided a weak forecast for the current quarter, attributing it to a decline in advertising spend. The company is now expected to report fiscal 2024 revenue of $5.34 billion, as per LSEG data.

Snap's stock has dropped approximately 45% this year. To counter this, the company plans to introduce new ad placements driven by machine learning and automation.

"You may be wondering why, with all of the progress we've made in our business over the last year, our share price performance has lagged the overall market. The answer is simple: our advertising business is growing slower than our competitors," Spiegel said, according to the report.

Additionally, Snap is investing in augmented reality and smart glasses, similar to Meta's offerings. "We are investing in creating augmented reality glasses that allow people to interact with computing, the world, and one another in totally new ways," Spiegel stated, according to the report.

In June, Snap launched generative AI tools that let users apply more realistic effects when filming themselves with their phone cameras.

Why It Matters: Snap's recent strategic shift comes amid a turbulent period for the company. Snap reported disappointing second-quarter earnings, with revenue falling short of expectations, although daily active users increased by 9%. The following day, several analysts revised their forecasts downward due to weak sales.

Recently, CNBC's Jim Cramer labeled Snap as "not investable," shaking investor confidence. Later in the month, Snap's stock chart indicated a "Death Cross," a bearish signal that has raised concerns among investors.

Price Action: Snap Inc. closed at $8.86 on Tuesday, down 5.14% for the day. In after-hours trading, the stock edged down 0.11%. Year to date, Snap's stock has decreased by 45.11%. Since its initial public offering in March 2017 at $27.09, the stock has dropped by 67.29%, according to data from Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote