Artificial intelligence is rapidly changing how consumers shop online, and Oppenheimer believes Etsy (NASDAQ: ETSY) could be one of the biggest beneficiaries. The investment firm also upgraded the stock from “perform” to “outperform” with a $90 price target.
Behind the bullish call is a simple idea: Consumers are beginning to change how they search for products online. Rather than starting every shopping journey with a traditional web search, more people are turning to artificial intelligence tools for product ideas, comparisons, recommendations, and inspiration.
Oppenheimer believes that this changing consumer dynamic will benefit Etsy. But that’s only one reason to consider the stock.
Anyone who’s used an AI model knows the nuance it adds to product searches. For example, a consumer can ask an AI assistant to find “a personalized anniversary gift for someone who loves gardening.” Instead of sorting through thousands of unrelated search results, the shopper could receive a more focused collection of relevant products.
Oppenheimer analyst Jason Helfstein cited the potential benefits of AI search, along with Etsy’s product improvements and stronger app engagement, when explaining the upgrade.
Shoppers Are Already Adopting AI
The shift toward AI-assisted shopping is no longer just an idea.
According to an Oppenheimer consumer survey, shoppers are relying less heavily on Google Search when looking for products. Instead, they are increasingly experimenting with artificial intelligence tools to discover items online.
Adobe Analytics data provided another encouraging signal, showing that nearly half of U.S. consumers used artificial intelligence for some part of their online shopping experience in June.
Consumers may use these tools to compare prices, summarize customer reviews, generate gift ideas, locate hard-to-find products, or narrow a large number of choices. As the technology improves, AI assistants could become increasingly involved in purchasing decisions.
Etsy Is Improving Its Marketplace
AI shopping traffic is only part of Oppenheimer’s bullish argument.
The firm’s survey found that consumers have noticed improvements in Etsy’s product listings and descriptions. Better listings can make products easier to understand and discover, whether customers are searching through Etsy’s website, its mobile app, Google, or an AI platform.
If the company can make its marketplace easier to navigate, shoppers may spend more time on the platform and feel more comfortable completing purchases. Stronger app engagement could also make a meaningful difference, since customers who regularly open the Etsy app can be reached through recommendations, promotions, and personalized shopping ideas.
Growth Challenges Have Not Disappeared
However, there are still challenges for investors to consider.
The company has been losing some ground in the online handmade-products market, and competition for consumer attention remains intense. Etsy must compete not only with specialized marketplaces but also with much larger e-commerce platforms, social media shopping channels and low-cost international retailers.
The economic environment can also influence demand. Many products sold on Etsy are discretionary purchases rather than necessities. When consumers feel pressure from inflation, higher borrowing costs, or economic uncertainty, spending on gifts, artwork, and home decorations can slow.
Despite those concerns, Oppenheimer now forecasts a 5% increase in gross merchandise sales over the next two years. Gross merchandise sales measure the total value of products sold through the platform and are an important indicator of marketplace activity.
What Oppenheimer’s Upgrade Means for Investors
Oppenheimer’s upgrade does not suggest that AI will immediately solve every problem facing the company. Instead, it reflects growing confidence that the platform is becoming better positioned to benefit from a major change in online shopping behavior.
Etsy offers exactly the type of merchandise that can benefit from personalized, conversational search. Its products are unique, highly varied, and often purchased for specific people or occasions. AI tools could help connect those products with shoppers who might otherwise struggle to find them.
For investors willing to accept the risks, Oppenheimer’s $90 price target suggests that Wall Street may be starting to see Etsy as an overlooked way to invest in the next phase of AI-powered commerce.
