Meta Platforms vs. Pinterest: Which Social Media Stock Will Outperform in 2026?

Core Viewpoint - Social media stocks, particularly Meta Platforms and Pinterest, are expected to rebound in 2026 after a volatile 2025, with Meta showing a gain of over 10% while Pinterest fell more than 10% [1] Group 1: Pinterest - Pinterest's stock experienced a 2.45% increase today, with a current price of $26.52 and a market cap of $17 billion [2][6] - Despite underperformance in 2025, Pinterest achieved a 16% revenue growth in the first nine months, with a 17% increase in Q3 revenue and a 24% rise in adjusted EBITDA [2] - The company saw significant growth in international markets, with European monthly active users (MAUs) increasing by 8% and ARPU rising by 31% to $1.31, while the rest of the world MAUs climbed 16% and ARPU soared 44% to $0.21 [3] - Pinterest is leveraging AI to transform its platform into an AI-powered discovery and shoppable platform, enhancing its recommendation engine and visual search capabilities [4] - The Performance+ offering utilizes AI to assist advertisers in creating effective campaigns, including dynamic ROAS bidding to target potential customers [5] - Pinterest's forward price-to-earnings (P/E) ratio is just above 13 times 2026 analyst estimates, making it cheaper compared to Meta's 22 times [7] Group 2: Meta Platforms - Meta Platforms' stock decreased by 1.47% today, with a current price of $650.42 and a market cap of $1.7 trillion [8][6] - The company experienced accelerated revenue growth throughout 2025, increasing from 16% in Q1 to 26% in the last quarter [8] - AI integration has driven Meta's growth, enhancing user engagement and ad targeting, leading to an 8% increase in daily active users and a 14% rise in ad impressions [9][10] - Meta is beginning to introduce ads on WhatsApp and Threads, which presents a significant long-term growth opportunity [10] - The company plans to reduce its metaverse spending by 30% next year, which is expected to improve profitability [11] Group 3: Comparative Outlook - Both Meta and Pinterest are positioned to perform well in 2026, benefiting from AI advancements and potential growth in advertising spend [13] - Pinterest is anticipated to outperform due to its undervalued stock relative to its growth and improvements in ARPU in international markets [14]