If the premarket losses persist, the decline is expected to wipe out approximately $4.36 billion from Pinterest’s market value.
Pinterest's results are in contrast with upbeat third-quarter revenue posted by digital ad bellwethers, including Google-parent Alphabet, Meta and Reddit, which were driven by robust advertisement spending.
Platforms such as Meta's Instagram and Facebook, and TikTok have become the preferred choice for global retailers heading into the holiday season due to their sprawling user bases and integrated advanced AI tools.
CFO Julia Donnelly flagged softer ad spends in the United States and Canada, the company's most lucrative market, in the third quarter as "larger U.S. retailers navigate tariff-related margin pressure in the current environment."
Retailers, especially China-based firms such as Temu and Shein, have scaled back their marketing budgets following the removal of the "de minimis" exemption and tariff-driven uncertainty.
"Performance has been fine, but we struggle to see a catalyst to drive the business and accelerate growth," Piper Sandler strategists said.
Pinterest expects quarterly revenue between $1.31 billion and $1.34 billion, with the midpoint below analysts' average estimate of $1.34 billion, according to LSEG-compiled data.
"In a market where companies' ability to deliver upward revisions from investments and innovation is important to driving multiple and share price appreciation, PINS failed to deliver," Morgan Stanley analysts added.
So far this year, Pinterest has gained 13.6%, higher than Meta's 7.2% gain in the same period.
