PINS Stock Jumps On $4B Cloud Deal With Amazon

• PINS to use cloud deal to expand its infrastructure and scale AI-driven features for its 600 million users. 
• Pinterest will deploy Amazon's custom chips and a new Kubernetes-based system to run its personalized visual search.
• The agreement marks the largest infrastructure commitment in Pinterest’s history.

Pinterest, Inc. (PINS) share price jumped about 6% on Thursday after the firm announced a major expansion of its AI infrastructure partnership with Amazon Web Services (AWS), committing $4 billion for cloud services through 2031.

The agreement marks the largest infrastructure commitment in Pinterest’s history. Under the terms of the deal, AWS will remain Pinterest's preferred cloud services provider. The investment is intended to accelerate Pinterest's artificial intelligence roadmap, deliver faster search and shopping features, and modernize the backend infrastructure that powers its global visual discovery platform.

Pinterest, which has collaborated with AWS since 2010, plans to scale its AI capabilities to serve more than 600 million monthly active users worldwide.

Pinterest-Amazon Deal Terms

The social media platform will broaden its use of Amazon’s custom silicon chips, including AWS Graviton processors and AWS Trainium. Graviton processors currently power roughly one-third of Pinterest’s compute infrastructure. 

The company plans to use Trainium chips to train and run large language models (LLMs) and vision-language models, which drive advanced features like personalized visual search, recommendation systems, and the multi-turn conversational tool, Pinterest Assistant.

"Pinterest is heavily investing in AI to make discovery more personal, visual and actionable for the hundreds of millions of people who use our platform every month," Pinterest Chief Technology Officer Matt Madrigal said in a statement. "This expanded commitment with AWS gives us the compute flexibility, hardware optionality, and infrastructure efficiency to accelerate our AI vision."

As part of the technical upgrade, Pinterest is migrating its compute operations from traditional Amazon EC2 environments to a cloud-native, Kubernetes-based architecture on Amazon Elastic Kubernetes Service (EKS), the company announced in a press statement. The transition is designed to improve developer velocity, platform reliability, and efficiency across its global systems.

PINS Stock Is Underperforming Peers 

Despite a growing user base, Pinterest stock has faced prolonged downward pressure, trading well below its previous 52-week highs. 

Apart from Reddit, most social media stocks have dropped in value over the past 12-month period, as per data from Koyfin. 

However, a host of brokerages, including BMO Capital, Deutsche Bank, UBS, Evercore ISI, and Stifel, raised their price target on PINS stock recently following the company’s stellar quarterly earnings.

BMO hiked targets from $28 to $30, Deutsche raised to $24 from $16 and UBS lifted to $30 from $29. 

PINS Retail View 

Retail sentiment on Stocktwits was “bearish” with “low” message volumes. The stock had 45,700 watchers on Stocktwits and message volumes have eased about 60% over the past seven days. 

One user questioned whether higher visual AI would lead to better user engagement.

https://stocktwits.com/DJEuphoria/message/655416740

PINS stock has lost 15.6% year-to-date.

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