Shares of Snap Inc (SNAP.N) jumped over 5 per cent on Monday after several of the Snapchat owner's IPO underwriters handed it badly-needed "buy" ratings.

Snap's listing on March 1 was the largest by a technology firm in three years, but trading has been volatile, with many investors critical of lack of profitability and decelerating user growth.

Analysts unrelated to the IPO had in recent weeks mostly assigned neutral or negative ratings to the stock, making it one of the worst-rated on Wall Street.

But on Monday, at least eight banks involved in Snap's IPO gave it positive ratings, including Morgan Stanley and Goldman Sachs. That sent the stock up 5.6 per cent to 24.05 at mid-day.

That left Snap up 40 per cent from its US$17 initial public offer price, but still down more than US$3 from its peak in its second day of trading.

The Los Angeles-based company's app, which allows users to share short-lived messages and pictures, is popular with young people but faces intense competition from larger rivals such as Facebook Inc's Instagram. Snap has warned it may never become profitable.

Like many technology companies popular with consumers, including Facebook and Alibaba, Snap's IPO was a hit with non-professional investors.

TD Ameritrade said that Snap accounted for 7 per cent of trading volume on its online platform during the stock's first day of trading. As of last Thursday, almost half of its retail customers who bought the stock in the IPO have since sold their shares.

"SNAP's engaged/hard-to-reach millennial users and unique video offerings should attract significant ad dollars," said Morgan Stanley analyst Brian Nowak in a note to clients. He started the stock with an "overweight" rating and a US$28-price target.

JP Morgan, also an underwriter, started Snap with a "neutral" rating, with analyst Doug Anmuth pointing to an "increasingly competitive social media landscape."