Even AI hype has its limit. Pinterest just found it
The company said a new AI shopping tool was "paying off." With tariffs hitting ad spending, investors didn't see it that way
Nikolas Kokovlis/NurPhoto via Getty Images
Pinterest’s bet on artificial intelligence failed to reassure investors this week. Shares sank 21% on Wednesday after the company reported weaker-than-expected guidance and warned of softer ad spending linked to trade tariffs.
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The digital platform recently rolled out an AI tool called “Pinterest Assistant,” a shopping assistant that gives product recommendations. The company says the assistant is built on its in-house “taste-graph” model and “multimodal” visual-language technology.
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“Our investments in AI and product innovation are paying off,” chief executive Bill Ready said in a statement. “We’ve become a leader in visual search and have effectively turned our platform into an AI-powered shopping assistant for 600 million consumers.”
Investors did not see it that way. The company missed Wall Street’s profit expectations, posting adjusted earnings per share of 38 cents instead of the projected 42 cents. Revenue met estimates at $1.05 billion, up 17% from a year earlier, but the outlook signaled slower growth ahead.
Chief financial officer Julia Donnelly said Pinterest saw “pockets of moderating ad spend” in the U.S. and Canada during the third quarter as “larger U.S. retailers” faced tariff-related margin pressure. She added that “we see these broader trends and market uncertainty continuing with the addition of a new tariff in Q4 impacting the home furnishing category.”
In September, President Donald Trump imposed a 10% duty on imported timber and lumber and a 25% duty on kitchen cabinets, bathroom vanities, and related furniture.
Pinterest forecast fourth-quarter revenue of $1.31 billion to $1.34 billion, with the midpoint below Wall Street’s $1.34 billion estimate. The guidance erased the company’s stock gains for the year. The platform reached 600 million monthly active users, beating analyst projections of 590 million.
Pinterest’s results stood out from digital platform peers for the wrong reasons. Meta’s revenue rose 26%, Amazon’s online ad unit grew 24%, and Alphabet’s advertising sales increased nearly 13%. Reddit reported a 68% surge in sales during the same period.