Sophie Blake
Pinterest shares surged more than 12% in premarket trading on Friday after the platform issued a robust quarterly revenue forecast, easing investor concerns over a potential downturn in digital ad spending tied to global economic uncertainty.
Despite ongoing geopolitical instability and rising fears of inflation due to shifting U.S. trade policies, Pinterest’s Q1 performance demonstrated resilience. The company now finds itself in the company of digital peers like Meta and Reddit, which also posted better-than-expected earnings amid mounting macroeconomic pressure.
Central to Pinterest’s recent success is its investment in AI-powered ad tools and an expanding Gen Z user base—factors that have increasingly appealed to advertisers seeking more efficient campaign targeting. The platform’s global monthly active users rose 10% year over year to 570 million, surpassing expectations, according to data from LSEG.
The platform acknowledged a notable reduction in ad spending from Asian e-commerce companies. This follows changes to U.S. import rules that eliminated the “de minimis” tariff exemption, prompting companies like Shein and Temu to pull back on their marketing budgets.
Analysts at Barclays warned that if tariffs continue to rise, the outlook for e-commerce advertising could deteriorate further by year-end, potentially curbing consumer spending and brand investment.
Nonetheless, if Friday’s gains hold, Pinterest is poised to add more than $2.5 billion to its market valuation. Even with global trade uncertainty on the horizon, investors appear confident in the platform’s ad strategy and user growth. Pinterest now trades at 14.5 times projected earnings for the next 12 months, still more modestly valued than Reddit and Snap, offering a potentially compelling proposition for long-term investors.
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