PINS Gains 21.7% in 3 Months as AI-Led Growth Builds: Can Rally Last?

Pinterest, Inc. PINS shares have gained 21.7% in the past three months, putting the durability of the rebound at the center of the investment case. The advance comes as second-quarter revenue growth, record users and AI-led ad improvements show better operating traction.

Still, the rally has a mixed backdrop. Earnings estimates have moved lower and AI infrastructure and go-to-market spending are rising. Investors are weighing improving monetization against the risk that near-term earnings momentum may not keep pace with the stock's recovery.

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Pinterest's Q2 Strength Supports the Rebound

Second-quarter 2026 revenues increased 18% year over year to $1.18 billion. Non-GAAP earnings of 43 cents per share topped the Zacks Consensus Estimate of 36 cents by 19.4%, while U.S. and Canada revenues rose 18% to $880 million.

Profitability improved alongside the top line. Adjusted EBITDA increased 24% to $311 million, with the margin reaching 26%. Pinterest also generated $270 million in free cash flow, supporting the rebound with stronger earnings and cash generation.

PINS AI Ad Tools Strengthen Monetization

Pinterest Performance+ automates campaign setup, bidding, budgeting, targeting and creative optimization. Advertisers using it have generated better return on ad spend and faster spending growth than non-adopters. Smart Assembly delivered a 6% average improvement in click-through rate in early alpha testing, while Business Assistant remains in beta.

Competition is moving quickly. Meta Platforms, Inc. META reported second-quarter ad impressions up 14% and average price per ad up 12% while saying AI is accelerating its core business. Snap Inc. SNAP posted 19% second-quarter revenue growth and cited improving advertising performance. Pinterest still must convert its AI tools into durable advertiser returns as rivals improve their ad platforms.

Pinterest Keeps User Growth at Record Levels

Global monthly active users reached 640 million in the second quarter, up 11% year over year. That marked Pinterest's 12th consecutive quarter of record users and its 11th straight quarter of double-digit user growth, with gains across all three reported regions.

Gen Z remains Pinterest's largest and fastest-growing cohort and represents more than half of its user base. The platform handles more than 80 billion searches each month, with the vast majority visual and more than half commercial, providing a sizable base for personalized discovery and shopping.

PINS Estimate Cuts and Costs Limit the Upside Case

The current fiscal-year earnings per share estimate has moved 5.2% lower over the past four weeks and 10.7% lower over the past 12 weeks. Those revisions temper the earnings backdrop after the recent share-price gain and leave the rebound without an equally favorable estimate-revision signal.

Investment intensity is another offset. Non-GAAP cost of revenue rose 25% to $245 million in the second quarter, partly because of additional graphics processing unit capacity and tvScientific. Non-GAAP operating expenses increased 13% to $629 million, driven by sales and marketing plus research and development spending for AI and product initiatives.

Pinterest Signals Favor Growth Over Momentum

The rebound has operating support, but the evidence does not make a clean case for chasing PINS after a 21.7% three-month move. Revenue growth, record users and improving ad tools strengthen the fundamental case, while estimate cuts and higher investment spending keep the near-term setup balanced. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

PINS currently carries a Zacks Rank #3 (Hold). It has a VGM Score of B and Growth Score of B, compared with a Value Score of C and Momentum Score of D. Because the Zacks Style Scores complement rather than override the Zacks Rank, the combination points to favorable growth characteristics but a weaker momentum profile and a mixed short-term signal.

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This article originally published on Zacks Investment Research (zacks.com).

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