Citi sees 3 major risks in Pinterest stock’s path to recovery

Pinterest Inc (NYSE: PINS) crashed more than 20% this morning after reporting a “disappointing” Q4 and offering current-quarter guidance that suggested things aren’t expected to improve anytime soon.

And while the company’s management attributed much of this weakness to “tariffs,” Citi analysts believe there’s more at play here that could make it difficult for PINS to swiftly recover in 2026.

On Friday, the investment firm downgraded Pinterest stock – that’s already lost some 60% in recent months – to “neutral” and slashed its price target by more than half.  

Citi agrees tariffs remain an overhang for Pinterest stock

Citi analysts also agreed that the most immediate threat to Pinterest’s bottom line is a tariff-driven decline in ad spending from its most loyal customers.

Retailers across the US, Canada, and Europe – especially in home furnishings and décor categories that Pinterest relies on – are pulling back their budgets to offset rising import costs.

According to the investment firm, it isn’t just a domestic issue; the second-order effects have already started hurting Pinterest’s sales growth in Europe.

Following the post-earnings plunge, PINS stock is trading well below its major moving averages (MAs), indicating bears are now firmly in control and a near-term rebound is unlikely.

What else could hurt PINS shares path to recovery?

Pinterest is currently like a house under renovation while its owners are still trying to host a party.

The company is in the midst of a major sales restructuring, having cut roughly 15% of its workforce in January to pivot toward an AI-first model.

Citi warns this creates significant “near-term execution risk” as the company rebuilds its “go-to-market” sales function from the ground up.

In its research note today, the investment firm highlighted that while these layoffs were intended to improve profitability, they have instead caused “meaningful disruption” to the teams responsible for courting advertisers.

When sales teams are in flux, relationships with high-spend brands often suffer, making it difficult for PINS to hit its revenue goals – and for Pinterest shares to recover swiftly – during this transition period.

AI disruption fears remain an overhang for Pinterest

Perhaps the most existential threat cited by Citi analysts is the “rapidly evolving AI landscape.”

AI disruption fears are mounting as giants like Google and Meta integrate sophisticated shopping tools directly into their chatbots and search engines.

Even more concerning is the emergence of OpenAI’s ad tools, which are beginning to siphon off marketing budgets by offering highly conversational, intent-driven shopping experiences.

Citi expressed concern that Pinterest’s visual discovery model – once its greatest differentiator – is being “cloned” and improved upon by competitors with much deeper pockets.

As Gemini and ChatGPT become the new starting points for product discovery, PINS shares face the daunting task of defending its market share against a wave of superior, agentic AI technology.

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