What Happened?
Shares of social commerce platform Pinterest (NYSE: PINS) jumped 4.1% in the morning session after a broad rally in the technology sector, sparked by stellar earnings reports from industry giants Meta and Microsoft.
Both technology titans reported results that surpassed analyst forecasts, driven by significant investments in artificial intelligence. Meta, a key competitor in the digital advertising space, saw its shares surge after revealing strong ad revenue. This powerful performance created a wave of positive sentiment that lifted other internet and technology stocks, as investors grew optimistic about the health of the digital advertising market.
The shares closed the day at $38.60, up 0.7% from previous close.
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What Is The Market Telling Us
Pinterest’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 3.2% after an upgrade from analysts at Morgan Stanley, who boosted their rating on the stock to "Overweight" from "Equal Weight.". The investment bank also raised its price target on the visual discovery engine's shares to $45 from $37, suggesting a potential upside of about 21% from its previous close. Morgan Stanley's increased optimism is based on the belief that Pinterest's investments in technology, particularly GPU-enabled innovations, are starting to pay off. Analysts at the firm noted that checks within the advertising industry show improved ad efficiency, relevancy, and performance-driven growth on the platform. This has led them to forecast revenue growth of 17-18% for Pinterest in the second half of 2025, which is about 4% above the general consensus on Wall Street. An "Overweight" rating generally means an analyst believes the company's stock will perform better than others in its sector.
Pinterest is up 26.2% since the beginning of the year, and at $38.60 per share, it is trading close to its 52-week high of $40 from February 2025. Investors who bought $1,000 worth of Pinterest’s shares 5 years ago would now be looking at an investment worth $1,126.
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