1. Pinterest, Inc. (NYSE:PINS)
Number of Hedge Fund Holders In Q2 2024: 61
Share Price Target Upside: 40%
Cantor’s Rating: Overweight
Cantor’s Share Price Target: $41
Pinterest, Inc. (NYSE:PINS) is one of the most unique websites in the world. It allows creatives and anyone else to search a large repository of images in its database to generate ideas for recipes, decor, fashion, and other users. Given the growth in internet use and speed, this creates a wide moat for Pinterest, Inc. (NYSE:PINS) within its specialty niche. Additionally, its image database nature also means that the firm can leverage its service for artificial intelligence image generation services. Key to Pinterest, Inc. (NYSE:PINS)’s hypothesis is its 460 million global active monthly users that provide it with a wide moat in its industry. Additionally, the firm’s success also depends on its ability to monetize its user base by allowing businesses to target them with advertisements. On this front, Pinterest, Inc. (NYSE:PINS) teamed up with eCommerce giant Amazon in 2023 to allow Amazon merchants to share their links on Pinterest. Cantor’s bullishness for the stock is based on the financial firm’s belief that Pinterest, Inc. (NYSE:PINS) can secure a stronger foothold in the digital advertising market.
Pinterest, Inc. (NYSE:PINS)’s management provided key details for its advertising performance during the Q2 2024 earnings call:
“Pinterest is a place where advertisers can build their brand in a positive environment, drive consideration when the consumer is not yet decided, and ultimately deliver conversions all on one platform. We see that over 90% of search queries don’t specify a brand or specific product, but rather a categorical interest, such as Fun Summer Dresses or Cool White Sneakers or Mid-Century Bedroom Decor.
This is a magic moment for advertisers to connect with users who have clear commercial intent, but have not yet decided what they want to buy. Many of our advertisers are taking advantage of the full funnel, with over half of our large advertisers using multiple campaign objectives. Moreover, advertisers who use upper and lower funnel objectives see two times higher conversion rates than those who use one objective alone. Within the full funnel, we focus the majority of our monetization efforts on the lower funnel to drive performance in the form of clicks and conversions to advertisers. We’ve made substantial progress across our entire platform to improve actionability and allow users to shop at the point of inspiration. Nowhere does this manifest more than within the lower funnel, where relevant shoppable ads can be great content on Pinterest.”
PINS is Cantor Fitzgerald’s top internet stock pick. But our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PINS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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