Pinterest forecast first-quarter revenue above market estimates on Thursday, betting on the image-sharing platform's artificial intelligence-powered advertising tools to boost ad spend, sending its shares up 22% in extended trading.

Pinterest Inc. posted strong holiday-quarter revenue and gave an upbeat forecast for sales in the current period, a sign that its advertising business continues to grow despite increased competition from much larger rivals in the social networking space.

Pinterest shares surged up to 20% after the company posted fourth-quarter earnings that beat revenue estimates. Pinterest's first-quarter sales forecast exceeds analysts' expectations at its midpoint.