Shares of Etsy (ETSY) are up 14% on Sept. 29 after the e-commerce company announced a new partnership with privately held OpenAI.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Etsy said that it will adopt OpenAI’s “Instant Checkout,” which is a new feature that allows users to buy products through its artificial intelligence chatbot called ChatGPT. The Instant Checkout will support single-item purchases made by U.S. Etsy sellers.
OpenAI plans to make Etsy products available to all users of ChatGPT in the U.S., in what could lead to a big boost in sales for the e-commerce company that specializes in selling handmade and vintage items, as well as crafts.
Partnership Details
Under terms of the deal, OpenAI will take a fee from Etsy transactions that are completed through ChatGPT, which means Instant Checkout could become a new revenue stream for the start-up company. OpenAI is not yet profitable, and is burning cash as it works to scale its computing infrastructure and artificial intelligence (AI) products.
However, Instant Checkout is free to users and will not impact their prices, said OpenAI in a news release. “Our vision for ChatGPT – and a lot of the technology we create, but especially ChatGPT – is that it’s not just providing you information, it is also helping you get things done in the real world,” said OpenAI.
Is ETSY Stock a Buy?
The stock of Etsy has a consensus Moderate Buy rating among 21 Wall Street analysts. That rating is based on eight Buy, 12 Hold, and one Sell recommendations assigned in the last three months. The average ETSY price target of $63.74 implies 13% downside from current levels.
