Pinterest plunges as tariffs weigh on large customers’ ad spending

A pin signifies the Pinterest office in Japan on a map at the Pinterest office in San Francisco, Wednesday, April 1, 2015. THE CANADIAN PRESS/AP, Jeff Chiu

Pinterest shares tumbled 21 per cent to their lowest since the 2020 pandemic lows after the image-sharing platform’s weak forecast showed that major advertisers are pulling back spending just as AI tools threaten to upend the market.

The company’s quarterly revenue projection fell short because of lower marketing spend by large U.S. retailers grappling with tariff-induced business uncertainty.

Pinterest is also rebuilding its sales teams after company-wide layoffs of under 15 per cent last month that were meant to power its AI pivot but fell flat with investors.

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Competition for advertising dollars is also heating up as OpenAI tests ads in ChatGPT, and Google rolls out features that allow consumers to buy products while looking for AI-powered answers in search and its Gemini chatbot.

That adds to a crowded field where brands are already favoring established players such as Meta and TikTok, which now exists as a separate entity in the U.S.

Pinterest’s results were also in contrast to the upbeat performances from Snap and Reddit.

“Pinterest is constrained by legacy monetization models amid a rapidly evolving AI landscape,” said Lenny Zephirin, CEO of market research firm Zephirin Group.

The platform “retains some differentiation through visual discovery and shopping-focused ad formats, but these advantages are unlikely to fully offset competitive pressures,” Zephirin added.

If the losses hold, this would be the second straight quarter Pinterest shares have fallen more than 20 per cent after its quarterly results.

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The company is set to lose more than US$2 billion from its market value of US$12.52 billion.

The company trades at 9.49 times the estimates of its earnings for the next 12 months, compared with 9.42 for Snap, 29.99 for Reddit and 21.41 for Meta.

At least 24 brokerages cut their price targets on Pinterest’s stock.

“We’ll probably see AI-powered Pinterest clones from Meta, OpenAI, and Amazon soon,” Bernstein analysts said in a note.

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Reporting by Kritika Lamba and Jaspreet Singh in Bengaluru; Editing by Maju Samuel and Tasim Zahid