By Angela Palumbo

Pinterest likely will keep on attracting users and increasing its revenue even if search traffic weakens, J.P. Morgan says.

Analyst Doug Anmuth upgraded shares of the photo sharing platform to Overweight from Neutral and increased his target for the price to $40 from $35 on Tuesday. That implies a 25% increase from the stock's closing price of $31.91 on Monday.

The shares were up 4% at $33.20 in afternoon trading. The stock has gained 14% this year, but is down 18% over the past 12 months.

Anmuth wrote in a research note on Tuesday that he believes Pinterest has done a good job at working towards goals the company laid out for investors in 2023. Those include attracting more users, deepening their engagement with the platform, finding better ways to cash in on the services it offers, and becoming more profitable.

"Importantly, we believe PINS is leveraging its full funnel ad approach and automation/AI capabilities -- including Performance+ -- to capture a greater share of ad spending among the next tranche of advertisers," Anmuth wrote. Performance+ is a Pinterest artificial-intelligence tool that helps advertisers with their campaigns.

Pinterest makes a substantial amount of its revenue from advertising.

Anmuth also likes Pinterest because he believes it is well protected from a potential loss of search traffic as Alphabet's Google changes its own business model in response to the advent of artificial intelligence.

As people who once would have used Google turn to platforms such as ChatGPT for search, Google has introduced its own AI tools, such as Google Overviews and AI Mode, to compete. That has reduced the need for some users to click on links to get answers to queries, a problem for companies such as Reddit that rely on Google users.

Anmuth believes Pinterest is different. "85% of MAUs [monthly active users] come directly to the PINS mobile app & 90%+ of PINS revenue is generated from the mobile app, which limits PINS' exposure to Google & broader overall search disruption," he wrote.

Write to Angela Palumbo at angela.palumbo@dowjones.com

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June 03, 2025 14:02 ET (18:02 GMT)

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