Yahoo Finance eBay (EBAY) Gains From E-commerce Strength With Generative AI
eBay’s EBAY shares have risen 22.8% in the year-to-date period, outperforming the Zacks Internet-Commerce industry’s rally of 12%. The company is gaining from the growing momentum in its e-commerce platform. eBay is constantly making strong efforts to strengthen its marketplace on the heels of generative AI technology.
In this regard, the latest rollout of an AI-powered background-enhancement tool powered by the open-source model Stable Diffusion bodes well.
The tool is capable of removing the current image backgrounds and replacing them with a backdrop of choice automatically.
Currently, the new background-enhancement tool is available in the United States, the U.K. and Germany for iOS users. It will be rolled out for Android users eventually.
The underlined tool positions eBay well to gain substantial traction among several sellers who lack the skills or tools to create professional-looking backgrounds.
eBay Inc. Price and Consensus
eBay Inc. price-consensus-chart | eBay Inc. Quote
Growing AI Efforts Aid E-commerce Prospects
According to a Mordor Intelligence report, the global e-commerce market size is expected to hit $8.8 trillion in 2024 and reach $18.8 trillion by 2029, witnessing a CAGR of 15.8% between 2024 and 2029.
Per Statista data, revenues in the e-commerce market are expected to hit $4.12 trillion in 2024 and reach $6.48 trillion by 2029 by seeing a CAGR of 9.5% over 2024-2029.
Given the fact that AI and generative AI technologies have become mainstream in the e-commerce industry, eBay is well-poised to capitalize on the above-mentioned growth prospects on the back of its increasing AI efforts.
eBay’s recent unveiling of a “shop the look” generative AI-powered feature within the iOS mobile app, offering personalized recommendations for customers, is noteworthy. This interactive feature suggests similar items and outfit inspirations based on customers’ shopping history, enabling fashionistas to shop for pre-owned and luxury items that match their style.
The company’s collaboration with Microsoft to integrate Azure cloud-computing software and open AI application programming interface into its core listing flow is a plus.
EBAY’s photo-to-listing AI tool is driving its momentum across marketplace sellers. The tool can create a product listing by automatically generating a title, description and information like product release date, category, subcategory, list price and shipping cost from a single photo.
The company’s acquisition of Certilogo, an AI-powered provider of digital IDs and authentication for apparel and fashion goods, is another positive. The buyout enables eBay to provide consumers with reliable product information and activate circular services.
These efforts are expected to aid eBay in delivering enhanced e-commerce experiences to both sellers and buyers, which, in turn, will boost traffic on its marketplace platform. This will drive its financial performance in the days ahead.
The Zacks Consensus Estimate for 2024 revenues is pegged at $10.26 billion, indicating year-over-year growth of 1.5%.
The same for 2024 EPS stands at $4.70, implying growth of 10.9% from 2023’s actual. The estimate has moved 0.2% north in the past seven days.
Generative AI Strength Aids Competitive Edge
Growing generative AI capabilities will help the Zacks Rank #3 (Hold) company in competing with its peers like Amazon AMZN and Shopify SHOP, who are also making increasing efforts to incorporate generative AI within their marketplace. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amazon’s introduction of an AI tool for sellers, which can write product listings from a series of keywords, remains noteworthy. The tool marks the first integration of large-language models into the company’s e-commerce business.
Meanwhile, Shopify Magic, Shopify’s AI tool, comes with the feature of AI-generated product descriptions with a built-in wordsmith in the merchant’s admin.
Shopify’s partnership with Alphabet’s GOOGL Google Cloud to help millions of merchants meet customers’ increasing demands while delivering generative AI-backed shopping experiences is noteworthy.
Alphabet is leaving no stone unturned to capitalize on the growing proliferation of generative AI in the e-commerce industry.
Alphabet’s Google provides advanced tools to advertisers, which allow various brands to create product imagery with the help of generative AI.
The search giant also offers a chatbot, namely Conversational Commerce Solution, which features generative AI-powered virtual agents that can be integrated into retailers’ websites and mobile apps.
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