AI is doing a lot of heavy lifting for Pinterest (PIN) as it wins over younger users.
“We've had a significant resurgence of the platform,” Pinterest CEO Bill Ready told Yahoo Finance's Executive Editor Brian Sozzi at Goldman Sachs' Communacopia + Technology Conference.
“Gen Z is now more than 50% of the platform, our largest, fastest-growing demographic. At the core of that is they're coming to Pinterest because they're getting really great AI-enabled shopping recommendations that are personally relevant to them.”
According to Adobe, 39% of Gen Z are most likely to begin their search on Pinterest.
Pinterest has posted eight straight quarters of record-high users. Its AI-driven recommendations outperform off-the-shelf models by 30 percentage points on relevancy for shopping, Ready added.
But not everyone sees a guaranteed path to continued growth. Pinterest is heavily reliant on Gen Z engagement and niche visual search — a narrower play than giants like Amazon (AMZN), Meta (META), or Google (GOOG).
Ready said the platform is still in the “early innings” of the AI cycle and sees a “multiyear runway.”
The company is pushing into new categories, including travel and autos, and diversifying its user base beyond its traditional female skew. Whether AI alone can keep the platform sticky remains to be seen.
Shares of Pinterest are up 20% in 2025, outperforming the S&P 500's (^GSPC) 11% gain.
Pinterest's second quarter sales rose 17% from the prior year to $998 million. Monthly active users (MAUs) hit a record at 578 million, up 11% from a year ago. Growth in users and average revenue per user were achieved in all geographic regions.
The Street took issue with two factors in the report.
Monthly active users were flat sequentially in the US & Canada segment and fell slightly in Europe. Plus, third quarter adjusted operating profit guidance implies a step down in margins versus the first half of 2025 as the company invests in AI talent and its sales force.
“We recognize that some short-term debates may persist on sequential user trends and rate/pace of second derivative relative ad performance, but would focus investors on the longer-term narrative for Pinterest – a management team that has centered its key strategy and product initiatives (shoppable content, direct response/bottom-funnel ad budgets and partnerships aiding in wider scaled monetization) as a means to produce solidly double-digit percentage compounded revenue growth and margin expansion on a multi-year view,” Goldman Sachs tech analyst Eric Sheridan said.
