Pinterest and Reddit Shares Fall Amid Tech Selloff and Slow Ad Sales

Pinterest stock fell 7% after Snap reported that its third-quarter advertising revenue grew by only 4%. That slow growth mirrors Pinterest’s own report from the previous week, which showed that ad prices fell 4% and fourth-quarter projections missed expectations.

The selling spread across the technology sector, with Reddit shares falling 9% and Meta Platforms dropping 4%. Even though Reddit's third-quarter revenue rose 53% to $895 million, its daily active users stayed flat at 130.3 million, and its fourth-quarter outlook fell short of Wall Street estimates. In contrast, Meta grew its revenue by 26% to $64.6 billion while raising its average price per ad by 14%, suggesting that advertising budgets are collecting at the largest platforms.

Analysts trimmed Pinterest's revenue estimates for 2027 down to $5.41 billion from $5.55 billion following its recent report. Analysts expect Pinterest's annual revenue growth to slow from 16% in 2025 to about 12% a year by 2027 and 2028. Because Snap's report is separate from Pinterest's business, analysts do not expect another round of cuts specifically tied to it.

Pinterest traded at 9.2 times its forward earnings at the last close, which is well below its five-year average of 23.7 times. That discount may be less attractive than it appears, because stock-based pay of $288 million used up nearly all of the company's $300 million in third-quarter free cash flow. Until Pinterest's ad prices begin to rise again, the stock is expected to trade like a company losing ground to larger competitors, with its early February report serving as the next chance to change course.

Summary

Pinterest and Reddit shares dropped during a tech sector selloff triggered by weak advertising growth at Snap. While major players like Meta continue to raise ad prices and grow revenue, smaller platforms face pressure from slowing ad sales and flat user growth.