Pinterest Inc (NYSE: PINS) is in focus this morning after the social media platform said it will lay off nearly 15% of its workforce and downsize office space considerably to “reallocate resources”.
The visual search engine believes these cuts will be completed by late September, and result in up to $45 million of pre-tax restructuring charges.
At the time of writing, Pinterest stock is down roughly 35% versus its 52-week high.
Do these cuts warrant buying Pinterest stock?
PINS stock appears significantly more attractive to own following this announcement because the company plans on reallocating related savings to artificial intelligence (AI) enabled products and capabilities.
This will address investor demand for better ad-targeting and “shoppable content”. As AI improves user intent matching, it drives higher conversion rates for advertisers, ultimately increasing ARPU.
Simply put, the announced cuts signal management’s commitment to transforming Pinterest from a high-cost social media platform to a high-margin AI discovery engine.
The lean, tech-first pivot will evolve PINS into a more scalable, efficient competitor, making it a more attractive growth story through the remainder of 2026.
Technicals favour owning PINS shares at current levels
Long-term investors should consider loading up on Pinterest shares today also because it’s trading at a more compelling valuation than peers like Reddit.
At a price-to-sales (P/S) multiple of about “4.4” only, the social media stock looks rather attractive especially now that it’s committed to an AI pivot.
According to latest filings, Cullen Frost has raised its stake in PINS by more than 50%, signalling institutional investors continue to believe in the firm’s future potential despite recent weakness.
Note that the NYSE-listed firm has an ongoing share repurchase plan in place as of early 2026 as well, which makes it even more promising as a long-term holding.
Taken together, these insights explain why options traders believe Pinterest will be trading at north of $31 – or up roughly 25% from here – by mid-May.
What else could drive Pinterest higher in 2026?
In the near-term, Pinterest’s upcoming earnings could prove a “tailwind” that drives its share price higher.
The social media company is expected to report 40 cents of per-share earnings for its fiscal Q4 in the second week of February – up an exciting 21% on a year-over-year basis.
In short, the San Francisco-headquartered firm has a healthy balance sheet with ample liquidity to support innovation, which – together with the AI pivot – positions it to capture higher ad spend in a competitive digital landscape.
Investors could also take heart in the fact that Wall Street analyst remain bullish as ever on PINS shares for 20256.
According to Barchart, the consensus rating on the visual search engine sits at “moderate buy” – with price targets going as high as $45 indicating potential upside of a whopping 80% from here.
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