HSBC Downgrades Pinterest Amid AI Strategy Challenges
Pinterest Inc. shares fell 3.00% as the stock hit a 52-week low amid broader market declines.
HSBC Global Investment Research downgraded Pinterest from a 'buy' to a 'hold' rating, primarily due to the company's recent 15% job cuts aimed at reallocating resources to AI-focused roles, indicating a softer near-term outlook. Despite Pinterest's competitive advantage in its user data set, HSBC noted that the lack of indications for cost savings or revenue acceleration presents challenges in resource allocation, making it difficult to compete with larger, better-resourced tech companies. The price target for Pinterest has been reduced from $34.50 to $24.90, raising concerns about its future growth prospects.
The downgrade reflects ongoing challenges for Pinterest as it attempts to pivot towards an AI-driven strategy while facing significant market pressure. Investors will be closely watching how these changes impact the company's performance in the coming quarters.
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