Nvidia-backed (NVDA) AI firm Perplexity has quickly gained attention for raising money at a $20 billion valuation and for talking about bold acquisition ideas like buying Google’s (GOOGL) Chrome Browser. But while it’s growing in name recognition, its actual business efforts in advertising and online shopping have been slow to take off, according to The Information. Indeed, nearly a year after Perplexity started allowing ads and letting people shop through its app, marketers say they have had a frustrating experience. This is because only a tiny number of advertisers and brands have been approved.
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Perplexity is being careful not to flood the platform with ads in order to keep the user experience clean. However, this slow rollout has raised doubts about whether Perplexity will even continue with advertising. Originally, the firm called the effort an experiment, and its ad head, Taz Patel, left the company last month. Still, how Perplexity handles both ads and shopping matters a lot to AI investors because these are two major ways to make money outside of paid subscriptions. Nevertheless, only about 0.5% of advertisers who asked to run ads were accepted, and the company is intentionally moving slowly.
Ads appear as “sponsored follow-up questions,” and even those advertisers allowed in often felt disappointed. Furthermore, Perplexity made just $20,000 in ad revenue in Q4 2024 and was working with only about a dozen advertisers earlier this year. Meanwhile, its e-commerce push is a bit stronger. It lets users buy select products directly through a service called Buy With Pro, using PayPal or Venmo, but only for certain items. If that option isn’t available, shoppers must go to an outside site. But brands still can’t directly upload product data, and the lack of a shopping cart has turned some retailers off.
What Is a Good Price for NVDA?
Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 35 Buys, two Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $211.26 per share implies 19.3% upside potential.
