Tech stocks have been on fire this year as the artificial intelligence (AI) boom provides a tailwind for several of the industry’s biggest players. Some AI-focused companies still have plenty of room to grow, so it may not be too late to invest there. However, investors might also consider going against the market and buying shares of companies that have not performed well this year, provided those companies have significant upside potential. An example that fits perfectly is Pinterest (PIN 1.63%). Here’s why social media specialist is worth investing in.

Pinterest has made progress

Despite its unimpressive stock performance this year, Pinterest has been moving in the right direction on several fronts. The company faced a slowdown in the advertising market and a decline in monthly active users (MAU) a few years ago, but the social media giant has mostly put those headwinds in the rearview mirror. In the second quarter, Pinterest’s MAUs increased 12% year over year to 522 million, a new record for the company.

Growing its ecosystem is essential for Pinterest: the more users it has on its platform, the more attractive it becomes to businesses looking to launch ads to target specific customers. Pinterest’s second-quarter revenue jumped to $854 million, up 21% from last year. Better yet, Pinterest made a profit. The company’s net income of $8.9 million was much better than the net loss of $34.9 million recorded in the year-ago quarter.

With such financial results, why isn’t Pinterest performing better in the market? The company’s shares fell on the heels of its second-quarter earnings release, in part because investors didn’t like management’s results. forecast for the third quarterwhich predicted slower revenue growth. The market is forward-looking, they say, but perhaps, in this case, it’s not looking far enough into the future.

In my opinion, Pinterest remains a great long-term bet despite the short-term challenges it may face this year. Here’s why.

The long term vision

Pinterest’s 522 million MAUs probably haven’t peaked. It is true that the company faces strong competition in the field social media industrybut there is room here for multiple winners to coexist, as they have for some time. Pinterest is different from most major social media platforms. His visual flavor and desire to avoid divisive social or political issues make him unique among his peers. So there is still huge growth potential, especially as it expands into international markets.

When will Pinterest reach its peak? Note that Facebook, the largest social networking site in the world, has just over 3 billion MAUs. Pinterest might not go that far, but in my opinion it could eventually reach 1 billion users. In Q2, 288 of Pinterest’s MAUs were in the Rest of the World (ROW) category (excluding Europe and North America). However, the rest of the world grew faster than all other regions. It also has the lowest average revenue per user (ARPU), by far.

In other words, Pinterest has substantial opportunities to continue to grow its user base and improve its monetization efforts in these markets. Additionally, one of Pinterest’s long-term goals is to make the platform an e-commerce platform. Progress has already been made in this area. Pinterest recommends relevant ads and shoppable content to users based on their tastes. This is where the company uses AI. Pinterest uses an AI-based algorithm to display relevant content to each user, hoping to inspire them to take action.

The company is getting better and better at presenting precisely what users want: outbound clicks from Pinterest have increased by more than 100% for three quarters in a row. Between the company’s monetization opportunities in international markets, increased purchasing capabilities, and remaining user growth potential, Pinterest could deliver outsized returns to investors, provided they see past volatility at short term.