Buy this social media stock with strong growth potential, says Morgan Stanley

Morgan Stanley upgraded Pinterest (PINS) to Overweight from Equal Weight, raising its price target to $45, citing GPU-powered innovation, attractive valuation, and an underappreciated reacceleration in top-line growth. The firm projects 17-18% revenue growth in 2H 2025, exceeding consensus, positioning PINS as a potential beneficiary of GPU/GenAI investments, a dynamic historically leading to outperformance for tech names. This upgrade, which prompted a 4%+ share rally, signals increasing institutional confidence in Pinterest's growth trajectory ahead of its Q2 earnings on August 7th.

Analysis

Morgan Stanley has upgraded Pinterest (PINS) to Overweight from Equal Weight, increasing its price target to $45, which implies an approximate 21% upside from its previous close. The upgrade is predicated on three primary factors: tangible results from GPU-powered technology investments, an attractive valuation, and an anticipated reacceleration in top-line growth that the market is currently underappreciating. The firm's analyst, Brian Nowak, projects revenue growth of 17-18% for the second half of 2025, a forecast that exceeds current consensus estimates. This positions Pinterest as a potential beneficiary of the GPU/Generative AI trend, a dynamic historically associated with outperformance in tech stocks that exhibit both accelerating growth and expanding margins. The market has responded positively, with shares rising over 4% on the news, contributing to a 28% year-to-date gain. This bullish stance from a major firm reinforces the broader positive sentiment, as LSEG data indicates 32 of 41 analysts covering PINS already rate it a buy or strong buy, with the upcoming Q2 earnings release on August 7th serving as the next major catalyst.

Key Decisions for Investors

• Investors may view the Morgan Stanley upgrade as a signal to re-evaluate Pinterest, particularly its potential as a GPU/GenAI beneficiary with a clear path to accelerating revenue growth beyond current consensus.
• The upcoming August 7th earnings report is a critical catalyst; traders and investors should monitor these results closely for evidence of the monetization improvements and top-line reacceleration cited in the upgrade.
• Given the stock's 28% year-to-date appreciation and broad positive analyst consensus, investors should assess if the risk/reward profile remains attractive or if the positive outlook is already substantially priced in ahead of the earnings release.