By Adam Clark

Meta Platforms and Alphabet are clear winners from the artificial-intelligence boom, but Pinterest stock could offer bigger gains as the technology transforms the ad industry, according to analysts at Mizuho.

Online advertising could be set to gain from an "AI land grab" that could accelerate the whole market, wrote Mizuho's Lloyd Walmsley in a research note on Monday.

"We are particularly bullish on the online advertising space broadly, driven by several themes, most notably AI driving more user engagement, better advertising efficacy, helping expand the addressable market, and on the cusp of benefiting from a wave of customer acquisition spending from AI native companies," wrote Walmsley.

It is perhaps little surprise that Meta and Google are well placed to benefit from those trends. Meta has said that AI is significantly increasing the time spent on its platforms, such as Instagram and Facebook, while it has also deployed AI tools for advertisers. Google is not only similarly set to see increased engagement on YouTube, it can feed vast amounts of data into AI to improve advertising.

The Mizuho analysts launched coverage of Meta with an Outperform rating and a $925 target price. Shares were at around $743 before the market opened on Tuesday.

The price target is based on a multiple of 25 times Mizuho's forecast for Meta's fiscal 2027 earnings. The analysts forecast the social-media company's advertising revenue will grow 18% in 2026 and 16% in 2027, narrowly ahead of the current Wall Street consensus.

Alphabet got an Outperform rating and a target price of $295 from the Mizuho analysts, while the stock was at about $244 before the open. The analysts said there is still some debate about the threat to Alphabet's core search business from AI, but argued that its own AI advances are blunting the threat of market-share losses to the likes of ChatGPT.

While Mizuho's analysis points to gains of roughly 20% to 25% for Meta and Alphabet stock, the firm sees the most dramatic potential for Pinterest. Walmsley and colleagues launched coverage of Pinterest stock with a $50 target price, almost 50% above its premarket price of $33.60 on Tuesday.

"We model upside to consensus estimates and expect valuation multiples to expand as [Pinterest] delivers sustained top line growth and margin expansion," wrote Walmsley.

Pinterest has been investing heavily in AI, with the goal of showing more relevant content to users and improving efficiency for advertisers. The Mizuho team expects that to pay off with a bigger share of advertising budgets.

Pinterest was a Barron's stock pick in June. The shares have fallen slightly since then.

Write to Adam Clark at adam.clark@barrons.com

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September 30, 2025 09:21 ET (13:21 GMT)

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