Oppenheimer: AI search wins over consumers, upgrades Etsy (ETSY.US) rating to "Outperform"

According to Jinse Finance APP, product improvements, search result optimization, and strong competitive barriers have led Oppenheimer to upgrade Etsy (ETSY.US) from "Neutral" to "Outperform," with a target price of $90.

A survey of 2,500 American consumers shows that product improvements are taking effect, reliance on Google search (GOOGL.US) is decreasing, and dependence on AI is increasing. As a result, Jason Helfstein of Oppenheimer has raised his FY2026 gross merchandise sales (GMS) growth forecast to the highest in the market at 1%, and predicts GMS growth of 5% in both FY2027 and FY2028. This forecast already accounts for a loss of market share in the online handmade goods market due to new entrants.

Oppenheimer expects the global online handmade goods market to grow by 9% annually from 2025 to 2028. While the overall market expands, Etsy is projected to lose 117 to 135 basis points of market share in 2027 and 2028. However, this analysis is limited to handmade goods—which account for 73% of respondents in Oppenheimer's survey—while Etsy's product categories are much broader.

Helfstein points out that improvements to the Etsy platform and its AI search capabilities have not gone unnoticed by consumers. Survey results indicate that 65% of respondents are "very" or "somewhat" likely to make a purchase. The survey also shows that 73% of buyers purchase handmade or custom items, and 88% of buyers access Etsy's website/app directly rather than using Google search.

Etsy's stock price closed down 0.62% on Tuesday at $74, up about 34% so far this year, compared with an 11% gain for the benchmark S&P index in the same period.