Bank of America analysts view the recent Supreme Court decision striking down tariffs enacted under the International Emergency Economic Powers Act (IEEPA) as providing a meaningful tailwind for selected small- and mid-cap e-commerce names.
In a research note, analyst Michael McGovern observed that stocks across the SMID e-commerce cohort moved higher immediately following the court ruling. However, those advances eased once the administration introduced a new global tariff measure under Section 122.
BofA flagged the mixed policy backdrop as a source of differentiation across the sector, writing that the ruling will produce "winners and losers in SMID eComm." Within that framework, the firm identified Etsy as a standout candidate to capture upside from the decision.
McGovern noted that "Etsy is able to manage tariff volatility efficiently due to its diversification across trade routes and countries," and provided detail on the company’s sales mix to support that view. Roughly half of Etsy's gross merchandise sales are domestic, while the other half is divided among U.S. imports, exports and international-only transactions. No single import country supplies more than 4% of Etsy's sales, and the platform's top sourcing markets - including the U.K., Canada, Türkiye, India and Ukraine - account for only half of its import exposure.
According to BofA, that wide geographic dispersion functions as a practical "replacement factor". When tariffs push up costs in a particular market, sellers on Etsy can adjust by shifting sourcing or routing without facing major operational disruption, the bank argues.
The note also emphasized that Etsy’s management appears more focused on ensuring that tariff and customs frameworks "fit microbusiness specific realities" than on which legal authority the administration employs to set tariffs.
Among peers, BofA believes EBAY could be the next-largest beneficiary of the IEEPA ruling. By contrast, Wayfair and Chewy are viewed as likely to experience more muted effects because of their existing tariff structures and diversified supply chains.
Separately, the research commentary highlighted the immediate market reaction to the court decision and the subsequent tempering of gains after the announcement of the Section 122 tariff, illustrating how policy shifts can quickly re-weight investor expectations across the SMID e-commerce segment.
Related note on investor tools
The research bulletin also included a reference to an AI-driven stock screening product that evaluates companies such as EBAY across multiple financial metrics to generate investment ideas. That commentary described the tool's process-oriented approach to assessing fundamentals, momentum and valuation, while noting examples of previously highlighted winners.