Etsy, Inc. ETSY is taking a meaningful step forward in its artificial intelligence strategy by expanding beyond traditional recommendation engines into conversational experiences that directly support buyers and sellers. Rather than treating AI as a standalone feature, the company is integrating it across the marketplace to improve discovery, simplify decision-making, and reduce operational friction.
The buyer-facing conversational agent focuses on gift discovery, enabling shoppers to describe what they are looking for in natural language rather than relying solely on keyword searches. At the same time, Etsy has introduced a seller-focused agent that combines marketplace insights to help merchants make better business decisions, access relevant resources and streamline operations. These initiatives complement the company's broader investments in AI-powered discovery and matching, AI-generated buyer profiles and machine learning models that better connect shoppers with relevant inventory.
Beyond on-site tools, Etsy is also expanding its reach through off-site agentic commerce, partnering with major tech platforms including OpenAI, Microsoft, and Google. Recent developments include building an integrated Etsy App in ChatGPT and leveraging external channels to capture top-of-funnel traffic and drive high-intent shoppers directly to its marketplace.
By deploying conversational AI, Etsy is accelerating product development cycles, enabling new features to be built and iterated in weeks rather than months. This agility enables the platform to deepen buyer engagement, streamline seller operations and build a unique competitive advantage centered on personalization and human connection.
How eBay & Shopify Compare With Etsy
eBay Inc. EBAY is also embedding artificial intelligence deeper into its marketplace, but its strategy is centered on enhancing buyer engagement and seller productivity within its ecosystem. eBay has introduced Agentic Search, expanded AI-powered listing tools and strengthened personalized discovery experiences, with early testing showing higher search engagement and stronger purchase behavior. Rather than focusing on external agentic commerce partnerships, eBay is using AI to reduce marketplace friction, improve listing creation and deepen engagement, positioning eBay to drive incremental growth through a more intelligent shopping experience.
Shopify Inc. SHOP is taking the most aggressive approach toward agentic commerce among e-commerce platforms. Shopify is enabling merchants to sell seamlessly across AI-powered channels such as ChatGPT, Microsoft Copilot and Google while advancing the Universal Commerce Protocol to support open agentic commerce. Early results are encouraging, with AI-driven traffic and orders rising sharply as merchants benefit from structured product data and unified commerce infrastructure. By positioning Shopify as the commerce backbone for AI agents, Shopify is aiming to capture long-term growth as conversational shopping becomes increasingly mainstream.
What the Latest Metrics Say About Etsy
Etsy has seen its shares jump 20.5% over the past three months against the industry’s 10.4% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, Etsy's forward 12-month price-to-earnings ratio stands at 14.05, lower than the industry’s ratio of 20.64. ETSY is also trading below its 12-month median level of 19.99.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Etsy's earnings per share has been revised downward. The consensus estimate for the current fiscal year has fallen from $5.55 to $5.44, while the estimate for the next fiscal year has moved down from $6.40 to 6.37 over the past 30 days.
Image Source: Zacks Investment Research
Etsy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Etsy, Inc. (ETSY): Free Stock Analysis Report
eBay Inc. (EBAY): Free Stock Analysis Report
Shopify Inc. (SHOP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).