It sounds like science fiction, but AI shopping could soon become an e-commerce reality. You’re looking to buy a gift for mom or dad, or for running shoes under $100. An AI chatbot familiar with who you are, your tastes, your family’s tastes and even your finances helps in the quest. “How about a pair of Nikes on Walmart.com?” the bot asks. “It fits your budget right now.”
Welcome to the world of “agentic commerce,” a buzzy term for shopping powered by AI. The trend offers big opportunities for gains in Amazon (AMZN) stock and other big names in the e-commerce ecosystem like Google parent Alphabet (GOOGL), Facebook owner Meta Platforms (META), Walmart (WMT), Shopify (SHOP) and eBay (EBAY). It’s a potentially disruptive trend, underscored by OpenAI’s Sept. 29 announcement that it will soon allow shoppers to buy items directly through ChatGPT, its blockbuster chatbot that helped unleash the AI revolution three years ago.
What AI Shopping Means For E-Commerce Stocks
Tech-enabled shopping, where consumers get automated recommendations for what, where and when to buy, is not new. But retail and e-commerce giants are eyeing a future where AI can make shopping decisions faster and with more precision, based on detailed knowledge of products for sale, what you want or need, and even what you can afford.
AI-powered shopping agents are now a major focus for the Big Tech stocks and retailers as they explore ways to embed AI tools into their operations.
“Every retailer is at least dipping their toes and figuring out how can we implement AI,” CFRA analyst Arun Sundaram told Investor’s Business Daily. “It seems retailers are realizing this will likely apply to a lot more areas than initially thought.”
A lot is at stake. Americans alone spend more than $1 trillion annually in e-commerce transactions, according to eMarketer estimates. E-commerce companies are often among the top advertisers on Google’s search engine and Meta’s Instagram and Facebook.
AI chatbots are carving a place in that shopping ecosystem. An Adobe report published this summer found that referrals to e-commerce product pages from AI bots, including ChatGPT, jumped 4,700% year over year in July.
“We are finding customers are increasingly trusting the insights and responses they get from LLMs (large language models),” Adobe analyst Vivek Pandya told IBD.
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Chatbots Play Bigger Role
ChatGPT, with more than 700 million weekly active users, is at the center of the AI explosion. BofA Securities analysts estimate that ChatGPT will receive about 20 billion messages this year related to shopping. That number is based on a recent study from OpenAI’s Economic Research team, which found that about 2% of the 2.5 billion daily prompts ChatGPT receives involve “judging the quality of objects, services or people.”
ChatGPT is still just one of the ways consumers shop. About 30% of shoppers typically start their search for products directly on a marketplace site such as Amazon, according to a recent poll by e-commerce software platform Coveo. ChatGPT and other large language models were the starting place for just 3%.
But OpenAI’s announcement could build on ChatGPT’s momentum. The company will partner with Etsy (ETSY) to allow users to buy items within ChatGPT from U.S. merchants. Merchants with Shopify (SHOP) pages will soon also be able to offer direct sales through ChatGPT.
OpenAI will collect a fee on the transactions. Details of the plan have not been disclosed.
The plan could create a new revenue source for OpenAI, which has committed to spending hundreds of billions of dollars on data centers and other infrastructure to support its AI models.
Investors appear excited about ChatGPT’s potential to drive sales. Etsy stock jumped 16% following the news, while Shopify stock added 6%.
OpenAI’s Big Ambitions
OpenAI has bigger ambitions. The startup, which was recently valued at more than $500 billion by private investors, also launched an open-source tool for developers called the Agentic Commerce Protocol. The goal is to make it easier for other e-commerce platforms and sellers to offer product purchases directly through ChatGPT.
“This launch is just the beginning,” the company said in a blog post. “As AI becomes a key interface for how people discover, decide, and buy, the Agentic Commerce Protocol provides a foundation that connects people and businesses for the next era of commerce.”
The move could be a step toward “flipping the internet upside down,” D.A. Davidson analyst Gil Luria said in a client note. “We see this as an important milestone in changing the commercial structure of the internet away from human-targeted websites found through search, into chat-discoverable websites.”
OpenAI’s move may add to fears about ChatGPT disrupting Google’s massive search engine advertising business. Google stock fell 1% following OpenAI’s announcement.
“The deal suggests competition between OpenAI, Google and Amazon will likely ramp in the race to become the leading Agentic AI starting place,” BofA Securities analyst Justin Post wrote in a client note.
AI Shopping: The New Tech Brawl
Retail’s two biggest names have made big AI shopping moves of their own. Amazon unveiled Rufus, a shopping assistant that can help users narrow down choices and answer questions about individual products. Walmart introduced Sparky, an AI assistant with similar capabilities.
Both companies are eyeing broader agentic capabilities. In April, Amazon started testing a “Buy For Me” button with “agents” that allow customers to purchase products from other websites without leaving the Amazon site or app.
Walmart is promising that Sparky will soon power up agentic capabilities as well. In one example the company gave in a June blog post, telling Sparky “I need party ideas” will send the bot on a quest to find recommendations for themes, food and gifts all “highly personalized and coordinated within budget.”
Meanwhile, Google launched a series of shopping tools for its Gemini chatbot in July, including virtual try-ons and price tracking. Meta is pitching its Meta AI app as a place for recommendations and its AI-powered Ray-Ban smartglasses as a tool for identifying products. OpenAI’s Operator agent — launched earlier this year — allows for purchases from eBay and other sites.
Individual brands are getting in on the act too. Ralph Lauren worked with Microsoft (MSFT) to launch Ask Ralph, which provides styling inspiration and full outfit suggestions based on user prompts.
Eric Bellomo, e-commerce analyst with PitchBook, said AI and machine learning have long been integrated into digital commerce companies’ operations, ranging from advertising to employee training. But ChatGPT ignited greater interest. Retail is often an area where companies test technologies, he added.
“When we zoom out a little bit and think back to the internet and then onto cloud-based computing and mobile, commerce was a proving ground for a lot of these experiences,” Bellomo told IBD.
AI Shopping Turf War
For now, agentic commerce is still small.
Pinterest (PINS) Chief Executive Bill Ready recently painted a picture of AI-powered shopping as a long game. He told analysts on the company’s earnings call in July, “This notion of an agent just going and buying all the things for you without you doing anything, I think that’s going to be a very, very long cycle for that to play out.”
For one thing, retailers must grapple with the expected risks shifting to AI-powered e-commerce. One of them is that retailers could lose direct relationships with customers. Bellomo sees a “turf war” brewing among the biggest names in tech and retail.
Amazon has taken steps to limit the ability of AI bots from Google and others to crawl its website and scoop up data, The Information reported in late July. Shopify similarly set boundaries for agentic AI systems, according to a report from Modern Retail.
E-commerce analyst Juozas Kaziukenas put it this way in a LinkedIn post: “No one wants to be where the AI agents are shopping at — everyone wants to build AI agents that do the shopping.”
Amazon may have enough firepower to go it alone.
“If Amazon just wants to pull up the drawbridge on their moat, so to speak, they have an opportunity to do that,” Bellomo said. “They have an enormous source of product reviews. People start their searches on Amazon.”
Asked for further comment on agentic commerce, an Amazon spokesperson referred IBD to its blog post on the “Buy For Me” feature. “We want to make it even easier for customers to find any product they want and need,” the blog post says.
AI Shopping Boosts EBay Stock
Approaches to shopping agents vary. EBay has partnered with OpenAI on some initiatives, including a test of its Operator AI agent.
“It’s about meeting buyers where they are,” eBay’s Chief AI Officer Nitzan Mekel-Bobrov told IBD in an email. “Many shoppers now start on platforms like ChatGPT or Gemini.”
EBay also launched several other AI-powered tools. It has a generative AI assistant to help customers identify products on its site. A Magical Listing tool helps generate text and other information required from sellers to list products.
Long overshadowed by Amazon, AI is helping eBay stock gain backers on Wall Street. Shares have rallied more than 40% over the past 12 months. The company believes AI can help it offer more ways for customers to interact with its more than 2 billion product listings.
“Today, AI is streamlining listings, improving search and inspiring new ways to explore and shop,” eBay’s Mekel-Bobrov told IBD. “Looking ahead, we see agent-driven commerce as the next evolution in how people connect on eBay.”
Impact On Fintech
AI shopping could create headaches for another e-commerce segment: payments processors.
Financial services consultancy Edgar, Dunn & Co. projects that the total market for agentic commerce — meaning transactions initiated by AI agents — will reach $136 billion this year and could grow to $1.7 trillion by 2030. That increase will bring new challenges in preventing fraud and unauthorized purchases, the consultancy said in a research note.
Payments giants Mastercard (MA) and Visa (V) have already launched tools focused on agentic commerce. Financial technology firms like PayPal (PYPL), Square parent Block (XYZ) and Affirm (AFRM) are all preparing for agent shoppers as well.
Affirm CEO Max Levchin told IBD in a recent interview that he expects soon that an “AI companion will be with you every step of the way, all the way through checkout, as opposed to until you’re ready to go to a checkout.”
Recently, Google launched a payments protocol for agents in collaboration with PayPal, Mastercard and others. OpenAI’s Agentic Commerce Protocol appears to be a direct competitor. OpenAI has partnered with payments startup Stripe on its offering.
Consumer Buy-In For AI Shopping
As tech players build the infrastructure for agentic commerce, there is still one unsettled question: How often will consumers use agent shoppers? After all, shopping habits can be hard to break.
E-commerce hasn’t entirely disrupted in-store shopping. Online sales accounted for 16% of the $1.8 trillion that Americans spent on retail purchases in April, May and June, according to U.S. Census data.
For AI, trust and privacy remain major hurdles. “Hallucinations,” the publishing of incorrect information by models, are a serious concern.
A survey of 1,500 U.S. consumers by KPMG earlier this year found that 43% were uncomfortable with the idea of companies using generative AI to analyze their personal data for shopping recommendations.
Sucharita Kodali, a retail analyst with Forrester, said AI bots make the most sense for large retailers with millions of users and huge product catalogs to sort through. They may not make sense for smaller retailers with less inventory and fewer potential questions from shoppers.
Tools that try to harness technology to make shopping easier have historically run into the issue of just not having the right data. Apparel styling is one example.
“There have been so many companies that have tried to create fabulous styling solutions to mimic Alicia Silverstone’s closet from the movie Clueless back in the 1990s,” Kodali told IBD. “Nothing has worked. And a significant reason nothing has worked is because you need to really know the individual’s closet. And no one has the time or resources to take a picture of everything in their darn closet.”
Is ChatGPT An Ad Challenger?
CFRA’s Sundaram said shoppers are still mostly looking for value and fast delivery when they shop online.
“One of the biggest reasons people choose to buy on Amazon is the convenience,” CFRA’s Sundaram told IBD. “They also are competitive on price, but no one is going to beat Amazon in terms of delivery speed.”
AI agents could challenge another part of the shopping experience: Advertising. Wall Street is still debating the impact of generative AI bots on the search-based ad empire of Google and Meta’s dominance in social media-driven ads.
OpenAI’s Instant Checkout “will be fantastically successful for OpenAI as the foundation of its advertising business,” Eric Seufert, a media and marketing strategist, wrote in a blog post.
“While Instant Checkout may only appeal to a specific swath of the e-commerce merchant base, the data it gleans from facilitating transactions — data which can be attached to individual, logged-in ChatGPT user profiles — is enormously valuable for ad targeting,” he argued.
So far, OpenAI Chief Executive Sam Altman has taken a skeptical stance toward advertising on ChatGPT in public comments — but he hasn’t ruled it out.
Other competitors are moving forward. Meta recently told customers it will begin targeting ads on Facebook and Instagram based on conversations with its AI bot later this year.
Advertising Is Key To Amazon Stock
The spotlight on advertising is critical for Amazon, which is a major player in that space as well.
The tech giant is expected to collect $67.6 billion in advertising revenue this year, according to FactSet. It is leader in retail media advertising, which refers to ads sold within an online marketplace. The high-margin business is a key source of profit for Amazon’s overall North American retail segment.
Walmart, eBay, Etsy and app-based platforms like DoorDash (DASH), Uber Technologies (UBER) and Instacart parent Maplebear (CART) also are competing for advertising spending.
“We view the core businesses across our e-commerce coverage overall as largely immune to the rise of agents, though we do believe less traffic to e-commerce sites and apps may diminish the ability to garner retail media advertising budgets at a rate that would have occurred in the absence of agents,” Stifel analysts wrote in a recent client note.
Walmart’s Chief Technology Officer Hari Vasudev told the Wall Street Journal in May that the company is preparing to welcome new agent shoppers and “advertising will have to evolve.”
What AI Shopping Means For E-Commerce Stocks
The spotlight on AI-powered e-commerce is growing at a time of nervous Wall Street debate over the direction of AI.
Speculation about an AI bubble has hit both AI and some e-commerce stocks recently. Amazon stock slumped in recent weeks as its Relative Strength Rating dropped to 53 from 75 three months ago, according to IBD MarketSurge. Walmart shares are still up more than 12% year to date, but have shed nearly 2% this quarter. Its Relative Strength Rating has fallen to 70 from 84 three months ago.
But analysts remain upbeat about AI’s momentum in e-commerce and beyond. Some are adamant that talk of a bubble doesn’t make sense.
“Are you calling Walmart’s latest commitment to rewire its supply chain using AI a bubble?” Melius Research analyst Ben Reitzes said in a client note this week. “How about JPMorgan rolling out LLMs to 140,000 employees?”
The brawl is bound to become more heated in e-commerce where giants like Walmart, Amazon and Meta are sending strong signals that they don’t want to be left behind.
“This is still very, very early innings here,” CFRA’s Sundaram told IBD. “But everyone is thinking about how much they need to invest into this to stay relevant for the next 10-15 years because if they don’t, they could certainly fall behind.”
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