Pinterest Shares Surge After Strong Earnings, CEO Credits AI for Driving Ad Growth
Pinterest shares surged Tuesday after the social media platform posted stronger-than-expected quarterly results and a bullish revenue outlook, with executives crediting artificial intelligence for helping to boost advertising performance and user engagement.
Shares of Pinterest (PINS) climbed more than 13% to around $23 in afternoon trading, a day after the company reported first-quarter adjusted earnings of 27 cents per share on $1.01 billion in revenue, both figures topping analyst estimates compiled by Visible Alpha. Monthly active users also hit a record 631 million, signaling continued momentum for the image-sharing platform.
“Our AI investments are translating into better advertiser performance,” CEO Bill Ready told investors during the earnings call. “Pinterest Performance+, our AI-powered performance ad suite, continues to drive strong results for advertisers.”
For the current quarter, Pinterest forecast revenue between $1.13 billion and $1.15 billion, with the entire range above the $1.12 billion analysts had expected. The upbeat guidance helped ease some investor concerns about the company’s growth trajectory amid broader economic uncertainty.
The solid results and record user numbers could help shift sentiment around Pinterest’s stock, which had been under pressure this year due to tariff-related headwinds and a broader tech sell-off.
Analysts responded positively. JPMorgan raised its price target on Pinterest to $25 from $20, citing “early progress across monetization initiatives.” UBS lifted its target to $30, noting that Pinterest appears to be evolving from an “experimental” ad platform for large brands into a “more attractive destination” for consistent ad spending.
In February, Pinterest warned that advertising revenue growth was being hampered by tariffs imposed under the Trump administration, which led some clients to cut back on ad budgets. CFO Julia Donnelly said during Monday’s earnings call that while tariff-related headwinds persisted in the quarter, improvements to the AI features of Pinterest’s ad platform were helping to offset the negative impact. The company also announced in January it would lay off up to 15% of its workforce and reduce office space as it reallocates resources toward AI development.
Despite Tuesday’s rally, Pinterest shares remain down roughly 10% year-to-date, reflecting the broader challenges facing the company.
Market reaction was mixed among industry watchers. Sarah Lin, a digital advertising analyst at a New York-based consultancy, said: “Pinterest is finally showing that its AI investments are paying off. The user growth and revenue beat are strong signals that the platform is becoming more relevant to both users and advertisers.”
But not everyone is convinced. Marcus Chen, a former ad tech executive turned retail investor, offered a more skeptical take: “Sure, the numbers look good, but Pinterest is still a fraction of the size of Meta or Google in ad revenue. And they’re laying off people while patting themselves on the back for AI? That feels like a convenient narrative. Let’s see if they can sustain this growth when the tariff dust settles.”
Meanwhile, Jessica Torres, a small business owner who uses Pinterest for marketing, said: “I’ve noticed my ads are performing better lately. The targeting feels smarter, and I’m getting more clicks for less money. If that’s the AI they’re talking about, I’m all for it.”
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