Investing.com -- Redburn has reshuffled its ratings across second-tier social media platforms, upgrading Snap to Buy, downgrading Pinterest to Neutral and reiterating a Sell on Reddit, arguing that the sector's "fallen stars" must pivot away from growth-at-all-costs strategies to survive.

Analysts Joseph Barker and James Cordwell frame the report around a structural bifurcation in online advertising driven by AI.

"AI is driving a bifurcation of the online advertising market," Redburn wrote, with Meta pulling further ahead while smaller platforms find catch-up attempts "increasingly fruitless."

Against that backdrop, the firm argues the only viable path for second-tier platforms is a wholesale strategy pivot toward alternative monetization, smarter advertising and cost discipline.

Snap draws the most constructive view. Redburn lifted its price target to $10 from $5, pointing to a subscription business already running at a more than $1 billion annualized rate and a core advertising business it expects to swing from an estimated operating loss of $553 million in fiscal 2025 to a profit of $29 million in fiscal 2027.

The firm sees Snap as best positioned among peers for revenue diversification, given its high user loyalty and identity-driven assets.

Pinterest was downgraded despite a price target increase to $23 from $17, with Redburn criticizing the company for "doubling down on the same approach to growing the business that has failed it to date" and flagging it as having the least potential for revenue diversification among the three platforms.

On Reddit, Redburn trimmed its price target to $110 from $125, warning that advertising revenue deceleration and data licensing renewal risk leave the stock's premium valuation vulnerable.