Nicholas Mugalli
Institutional TMT & Macro Research, AI/Semiconductors/Policy
Pinterest's valuation looks capped near term as growth decelerates, until international monetization scales faster to offset ad budget sensitivity. Q2 beat on both lines, with revenue up 18% to $1.18 billion and monthly active users at a record 640 million, but Q3 guidance of $1.19-1.21 billion implies only 13-15% growth. Shares fell 10% after hours; buybacks offer long-term per-share support. x.comÂ
Reddit's worsening US user growth threatens its revenue runway despite elite ARPU growth, revenue growth and margin expansion. US daily users fell 2% year over year and missed estimates by 7%; the Q4 guide was weak. It needs healthier user growth in its most important market to dispel Google/AI discovery fears. Forward indicators do not look promising, and the trend of positive estimate revisions will end. x.com x.comÂ
Reddit carries Pinterest-like downside to a 10x P/E if investors decide North American user growth is toast, while the stock is priced on everyone playing for big numbers from new lab deals. x.comÂ
Pinterest is pretty cheap now, and its struggles stem from its own idiosyncratic issues that predate AI agents, so being long beats not owning it here. That answers @AStevens1969's point that Pinterest still struggles. x.comÂ
Pinterest looks cheap until you account for its stock-based compensation. x.comÂ
Reddit should have a huge 2027. It is a better company than Pinterest both fundamentally and technically, as its financials show. x.com x.com x.comÂ
The social-media selloff looks way overblown, because AI makes these companies leaner and more profitable rather than disrupting them. Reddit is the clearest case at about 24x forward EV/FCF with 91% gross margins and 52% growth, despite being down 44.6% this year; Pinterest is down 32.2%. Meta's capex draws bear cases, but forward revenue growth of 30-33% at about 17x forward earnings shows that spending is delivering ROI. These are buys, held with some confusion. x.comÂ
Snap is in a bad position when Pinterest is now the better business of the two. x.comÂ
Snap's European monetization is improving even without user growth. Q2 revenue per daily user rose 36%, from $2.65 in 2025 to $3.62 in 2026, while daily users slipped from 100M to 98M. That leaves room to generate more revenue from the existing audience rather than relying on explosive user growth. x.comÂ
Social media stocks look worth buying because they trade at a discount while people stay hooked on social media. Usage is now a permanent part of life that cannot be taken away, contrary to @CryptoDan007's prediction that it will come to be seen as a low-class pastime. That makes Meta, Reddit, Pinterest and Snap all candidates to buy. x.com x.comÂ
Reddit's post-earnings drop makes no sense after a blowout report. Revenue rose 61%, ad revenue 64% to $762M and international revenue 84%, with records in revenue, EBITDA, net income and gross profit; Q3 guidance of $860-$870M beat the $828M expected. Gross margin is 91.2%, ROIC 23.55% and the balance sheet virtually debt-free. The selloff likely came from the investor letter calling search referrals choppy, since user growth runs through Google and AI answers are eating search traffic. x.comÂ
