Morgan Stanley sends clear message on eBay, Etsy

Wall Street is taking a fresh look at eBay and Etsy, and the conclusions may surprise investors who have written off both companies.

In a research note shared with me, Morgan Stanley analysts Nathan Feather and Brian Nowak argue that the market is underestimating how well-positioned both platforms are for the next big shift in e-commerce: agentic commerce. 

That’s the move from typing keywords into search boxes to using AI-powered shopping assistants that can hold a conversation, compare options, and complete purchases on your behalf.

The bank set a price target of $121 on eBay (EBAY) shares and $64 on Etsy (ETSY), rating eBay Overweight and Etsy Equal-weight.

At the time of writing, eBay stock trades at $110 and ETSY stock trades at $69.

Why eBay could be the bigger winner here

eBay gets the more bullish call from Morgan Stanley, and the logic centers on one thing: inventory.

Roughly 90% of what sits on eBay’s platform is either used or out of season. That means most of it can’t be found anywhere else. 

According to the Morgan Stanley note:

• eBay has around 2.5 billion active listings, the majority of which are pre-owned items or goods no longer available in retail stores.
• When someone asks an AI assistant to find a specific vintage item or a discontinued part for their car, eBay’s depth of unique supply becomes a competitive advantage. The analyst team calls it an “inventory moat.”
• There’s also a pricing angle. Because so much of eBay’s stock is secondhand or off-season, prices tend to run lower than what you’d find at traditional retailers, which is crucial when AI agents start comparing options across platforms and surfacing the best value.
• eBay has also been investing in tools that make it easier to sell. Its “Magical Listings” feature uses artificial intelligence to help people photograph and post items in a fraction of the time it would otherwise take. 
• The second iteration of that tool cut the average time to create a listing by more than 25%, according to the Morgan Stanley note, and drove a meaningful increase in revenue per seller.
• On the demand side, eBay’s agentic search beta shows more than 50% higher engagement than traditional keyword search, according to the note.

In its bull case, Morgan Stanley sees eBay’s gross merchandise volume and earnings before interest, taxes, depreciation, and amortization (EBITDA) coming in 26% and 30% above its base projections by 2030, respectively. 

In a bear case, if off-platform agents disrupt eBay’s traffic flywheel, EBITDA could fall 26% below base estimates. 

The note explained:

“We see eBay as one of the best-positioned eCommerce names for agentic commerce.”

What about Etsy stock?

Etsy is a more complicated story, and Morgan Stanley’s Equal-weight rating reflects the same.

Many Etsy shoppers don’t arrive knowing exactly what they want. They come with a mission, a birthday gift, a wedding present, something handmade and personal. 

That’s precisely the kind of vague, open-ended request that agentic search handles better than a traditional keyword box.

Morgan Stanley estimates that for every $5 increase in spending per buyer, Etsy’s total gross merchandise sales would rise by 4%. 

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Analysts note that consensus forecasts model just a 3% annual growth rate in GMS over the next four years, meaning even modest improvements in purchase frequency could force meaningful upward revisions to estimates.

Etsy has also moved early on external AI partnerships. It’s already a founding partner in Google’s Universal Commerce Protocol, and users can buy Etsy items directly through Microsoft’s Copilot and Google’s Gemini app, according to the Morgan Stanley note.

But the long-term risks are harder to dismiss. Unlike eBay’s unique inventory, many of the items sold on Etsy aren’t exclusive to the platform. 

Morgan Stanley analysts reviewed Etsy’s top 100 shops and found that more than three-quarters of them also sell on other channels, often at lower prices. 

Related: Etsy is betting on old-school methods to drive sales

If AI agents start routing buyers to those cheaper alternatives, Etsy’s ability to justify its roughly 25% take rate, the highest among publicly traded pure third-party marketplaces, could come under pressure.

In its bear case, Morgan Stanley sees Etsy’s 2030 EBITDA falling by as much as 41% below base estimates if horizontal agents gain share and sellers divert traffic elsewhere.

In the bull case, however, improved frequency and on-site agentic experiences push 2030 EBITDA 40% above base-case projections, the note said.

The bigger picture

Both companies are navigating a tricky transition period. The consumer environment remains uneven, tariffs have added friction to cross-border trade, and agentic commerce is still in its early innings.

But Morgan Stanley’s analysis suggests the market may be pricing in too much risk for eBay and not enough opportunity for Etsy in the near term.

eBay CFO Peggy Alford noted in a June conference presentation that the company’s consumer-to-consumer business now makes up about 70% of gross merchandise volume and grew in the high teens in the first quarter of 2026. 

Etsy CFO Lanny Baker said at a separate conference in May that the company’s mobile app now drives 47% of GMS and is growing at 11% year-over-year, a sign that the platform’s push toward personalized, logged-in experiences is gaining traction.

Agentic commerce isn’t a sure thing for either company.

But if Morgan Stanley’s read is right, investors may be underestimating how much the shift could favor platforms with the right kind of inventor and the right kind of buyer intent.

Related: GameStop CEO Cohen makes surprisingly bold eBay bid