Pinterest's long-term growth

Pinterest shares are increasingly the choice of investment firms and hedge funds that believe in better monetisation and more advertising products on the platform. That's what Pinterest is doing for its long-term growth.

It's worth noting that Pinterest stock (PINS) is now valued by the market at almost five times what it was 12 months ago.

To date, Pinterest has shown a number of strong growth prospects both in 2021 and over the longer term.

Pinterest's fourth quarter and strong growth outlook

In February, Pinterest reported record revenue growth of 76% in the fourth quarter, a record for the company since its IPO in 2019.

The success was attributed to a combination of the festive season with strong demand from advertisers, strong growth in international users and gains from new advertising products such as Story Pins video ads and improvements in ad measurement tools.

Stable growth in gross profit and average revenue per user (ARPU) also added to the optimism, suggesting that Pinterest has quickly transformed from a high-loss company to one with a highly profitable business model, aiming to reach the level of digital advertising giants such as Facebook (FB) and Google (GOOGL, GOOG).

In addition, Pinterest has given a strong revenue growth forecast for the first quarter of fiscal 2021 of 70%.

How Pinterest uses artificial intelligence

According to a McKinsey study, up to 70% of companies globally will adopt some form of artificial intelligence (AI) technology by 2030, potentially increasing global output by $13 trillion a year. Pinterest aims to follow current trends and capitalise on AI and machine learning: by improving user experience, ad targeting, increasing the value of its platform to advertisers and seeking to demonstrate its competitive advantage and gain a greater share of the digital advertising market.

In this way, Pinterest gets valuable data for marketers and, at the same time, offers users highly relevant content and links to products they can buy.