The image-sharing social media company Pinterest saw its stock price climb 15% in after-hours trading Monday after announcing revenue projections for the upcoming quarter that surpassed analyst expectations.
The platform’s positive outlook stems from continued advertiser investment and recent technological improvements, including enhanced artificial intelligence features in its Performance+ advertising platform that streamline ad creation and improve audience targeting precision.
These technological advances, combined with efforts to court smaller businesses, are helping offset reduced spending from major advertisers who have cut back due to increased expenses from trade disputes and global tensions.
“Large advertisers remain important for stability but are not the primary growth driver,” stated Lenny Zéphirin, principal and analyst at The Zéphirin Group.
While demand from smaller businesses shows improvement for Pinterest, Zéphirin noted it continues to fluctuate with trade policy changes and broader economic conditions.
The earnings announcement follows Elliott’s recent disclosure of a $1 billion investment in Pinterest, supporting the company’s advertising strategy and backing a new $3.5 billion stock buyback initiative.
Pinterest faces ongoing competition from well-funded rivals including Meta’s Instagram and Facebook platforms, as major brands reduce platform spending amid rapid AI transformation in digital advertising and tariff-related cost pressures affecting profit margins.
Other social platforms are similarly investing in AI for growth acceleration. Reddit recently projected strong revenue increases powered by AI-enhanced advertising technology.
In February, Pinterest finalized its purchase of tvScientific, expanding advertiser reach from social media into connected television and accessing additional advertising budgets.
The company projects second-quarter revenue ranging from $1.13 billion to $1.15 billion, exceeding the $1.11 billion analyst consensus compiled by LSEG.
Pinterest reported 631 million global monthly active users at the end of the first quarter, representing growth from 570 million users during the same period last year.
First-quarter revenue increased 18% to $1.01 billion, surpassing analyst estimates of $966.25 million.
