AI-Powered Ad Performance and Shopping Integration
Pinterest’s AI-powered advertising solutions and Instacart partnership deliver measurable conversion boosts for advertisers.
Pinterest: Pin This to Your Portfolio: Pinterest's Visual Commerce Revolution
Accelerating growth prospects driven by AI-led advertising performance, and a marketplace that engages an authentically human user base that has high purchase intent
Updated: Sep 02, 2025
Media & EntertainmentTechnology
Bull & Bear Case
An overview of the main reasons to invest and the key risks involved.
Bull Case
Expanding Global Footprint and Diverse User Growth
Rapid growth in Gen Z, male users, and international adoption is broadening Pinterest’s audience and advertiser appeal.
Attractive Return Profile
~20x forward P/E value, and currently operating a $2B share buyback
Bear Case
Intense Competition from Tech Giants
Meta, Google, and TikTok can replicate features and capture users.
International Monetisation Challenges
Despite rising users abroad, lower ARPU outside North America could limit Pinterest’s total revenue potential.
Dependency on External E-commerce Partners
Dependence on e-commerce partners reduces platform control and increases risk.
Executive Summary
Pinterest operates as a visual discovery and search platform where over 570 million monthly active users find inspiration, curate ideas, and increasingly, shop for products. Unlike traditional social media platforms focused on social interaction, Pinterest serves as a unique "positive place online" where users actively seek and save ideas for future purchases, creating an environment with exceptionally high commercial intent.
The investment thesis centres on Pinterest's transformation from a simple idea-sharing platform into a comprehensive visual commerce engine. Under CEO Bill Ready's leadership since 2022, the company has strategically pivoted toward performance marketing and AI-driven shopping experiences, positioning itself at the intersection of inspiration and transaction. This evolution addresses a massive market opportunity as social commerce is projected to reach $1.2 trillion by 2025.
Investment Thesis
Overview of buy and sell case of the business.
Why Invest?
Key pieces of information about the business that you need to know about.
AI-Powered Ad Performance and Shopping Integration
Pinterest’s investment in AI has turbocharged its advertising engine. Tools like Performance+ are driving significant improvements for advertisers, with case studies showing up to 64% lower cost-per-action and notably higher returns on ad spend. The new Instacart partnership makes Pinterest ads directly shoppable, taking users from inspiration to checkout in a few clicks and providing advertisers with closed-loop measurement, linking ad impressions to real-world sales.
Expanding Global Footprint and Diverse User Growth
User growth remains robust, with global monthly active users rising 11% year-over-year to 578 million and international markets now contributing over a third of total revenue. Gen Z, accounting for over half of all users, and greater male engagement signal Pinterest’s expansion beyond historic demographics, fueling advertiser interest and opening new market opportunities.
Compounding, Durable Ad Revenue Model
Pinterest’s advertising business is proving highly resilient and durable, with recurring revenues and international ad impressions buoying results even as U.S. user growth plateaus. Leadership emphasises long-term, compounding effects from gradual utility improvements, such as AI-powered discovery and global infrastructure investments, over the volatility of “hockey stick” growth.
Catalysts
The key events that could drive investment opportunities and shift markets.
Continued rollout of Instacart x Pinterest integration: Users will complete grocery-related purchases within Pinterest, with select brands gaining access to high-intent Instacart shopper segments. Expect closed-loop measurement and proof of campaign impact.
Q3 earnings momentum: Guidance for $1.033–1.053 billion in revenue, driven by robust international ad demand and further deployment of AI-powered ad optimization tools.
Expansion of AI tools: Additional ad formats and non-U.S. locales, closing the monetization gap with advanced, personalisation-driven campaigns. Increasing regional sales hires and tech investments, particularly in Europe, are expected to amplify global returns.
New verticals and content: As more men and Gen Z users are attracted, Pinterest will diversify its content types, expanding into travel, video, and real-world commerce experiences.
Sustainable Ad Revenue: Persistent, recurring digital ad revenue streams as Pinterest cements its place in the performance ad ecosystem, mirroring long-term trends now driving Meta, Reddit, and Alphabet to new highs.
Durable differentiation: Emerges as “the” inspiration and discovery platform, backed by data-rich partnerships, compounding improvements, and cross-generational appeal.
Key Risks
Key pieces of information about the business risks that you need to know about.
Competitive Pressure from Tech Giants
Pinterest faces head-on rivalry from Instagram, TikTok, Meta, and YouTube, all of which boast larger user bases (e.g., Instagram and TikTok each ~1 billion+ users). These rivals can rapidly integrate similar AI-powered shopping or content features, threatening Pinterest’s retention and ad budgets.
International Monetisation Challenges
Although 84% of users are outside the U.S., average revenue per international user trails far behind North American levels. Bridging this gap will require localized ad products, improved infrastructure, and continued investment, all while managing FX volatility and regional economic cycles.
Platform Dependency on E-Commerce Partners
Pinterest’s strategy emphasizes discovery and handoff rather than direct transactions or fulfillment, leaning on partners such as Instacart, Amazon, and Shopify. Changes in third-party strategies, commission structures, or integration policies could impact Pinterest’s value capture, user experience, and advertiser outcomes.
Follow the Experts
Quickly navigate key insights from industry experts and leverage their knowledge and market intelligence.
Expert Insights
article
“we are turning positive as we think the benefits of these investments are set to drive under-appreciated acceleration and earnings power.”
Expert Insights
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"$PINS ... Reports Q2 (Jun) earnings of $0.33 per share, excluding non-recurring items, $0.02 worse than the FactSet Consensus of $0.35; revenues rose 16.9% year/year to $998.23 mln vs the $974.93 mln FactSet http://Consensus.Global MAUs increased 11% yr/yr to 578 http://mln.Co issues upside guidance for Q3, sees Q3 revs of $1.033-1.053 bln vs. $1.03 bln FactSet Consensus."
Expert Insights
article
" “I’m proud of our Q2 results — delivering 17% revenue growth and another quarter of record users,” Pinterest CEO Bill Ready said in a statement. “We’re also excited that Gen Z has grown to over half of our user base.”
Pinterest finance chief Julia Donnelly told analysts in the company’s Thursday earnings call that there’s still some lingering concern from advertisers related to tariffs “and broader market uncertainty” that the company discussed in May."
Investor Materials
Access the most recent investor updates published by the company.
Key Resources
2024 ESG Report
ArticleQ2 2025
PDF2024 Annual Report
PDFExternal Insights
A curated collection of third-party content relevant to the company and sector to help inform your investment decision.
Pinterest's Potential
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Team
Meet the experienced professionals leading our organization
Bill Ready
Julia Brau Donnelly
Malik Ducard
Matt Madrigal
What the Pro's Are Asking
Here are the questions that professional investors are asking before making an investment decision.
Can Pinterest sustain AI-driven ad growth as digital ad competition heats up?
Pinterest demonstrated in its latest earnings that AI-powered ad products like Performance+ are driving measurable improvements in conversion rates and advertiser ROI, helping it stand out against the competition. However, continued innovation and differentiation, particularly with unique partnerships like Instacart, will be crucial for sustaining performance as giants like Meta and Alphabet ramp up AI spending in digital advertising.
Will international monetisation “catch up” to U.S. levels, or plateau at a discount?
While international user and revenue growth far outpace the North American market (Europe up 34%, Rest of World up 65%), ARPU abroad remains much lower ($0.15 vs. $7.08 in the U.S.), indicating a sizable gap. Management is targeting this gap by investing in localized sales teams and ad products, but a complete “catch up” will depend on economic conditions, improved infrastructure, and the effectiveness of region-specific campaigns.
Is ad business revenue sustainable as competition, and user privacy standards, evolve?
Pinterest’s Q2 results showed strong recurring ad revenue and high advertiser retention, suggesting underlying durability in its business model even as competition intensifies. However, with evolving privacy standards and fluctuating ad demand, the sustainability of these revenue streams will rely on Pinterest's ability to balance privacy-compliant targeting with gradual, compounding improvements rather than aggressive growth spikes.
How is Pinterest diversifying its user base and shares of engagement?
Pinterest reported 578 million global MAUs with the fastest growth among Gen Z users and a notable rise in male engagement, supported by AI-driven discovery features that appeal across personas. As diversification accelerates, management must ensure product relevance and monetization strategies adapt for these segments while retaining the platform’s core of purchase-driven, highly engaged users.
Will new shopping formats and verticals open up transformative growth, or muddle the thesis?
Recent integrations, such as the Instacart partnership and expansion into video, travel, and lifestyle content, are designed to move Pinterest beyond traditional boards to direct, actionable commerce experiences. The success of these initiatives will be measured by conversion rates and user engagement; if executed strategically, they could yield transformative growth but require careful focus to avoid diluting the brand’s unique value as an inspirational shopping platform.