Etsy shares plunge 11% on weak guidance
Josh Silverman, CEO of Etsy.
Adam Jeffery | CNBC
Etsy shares slid more than 11% on Thursday afternoon, a day after the company reported better-than-expected second-quarter results but gave weak guidance for third-quarter revenue and gross merchandise sales, or GMS.
Here’s how the company did:
- Earnings: 45 cents per share, adjusted, vs. 43 cents per share, as expected by analysts, according to Refinitiv.
- Revenue: $629 million vs. $619 million as expected by analysts, according to Refinitiv.
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Etsy said Wednesday that it expects third-quarter revenue to be between $610 million and $645 million, which would fall short of the $632 million analyst estimate, according to Refinitiv. GMS, which measures the total number of goods sold over a certain period, is projected to come in between $2.95 billion and $3.1 billion. At the midpoint, it fell short of the $3.04 billion expected by a survey of Refinitiv analysts.
The weak guidance overshadowed an otherwise outperforming second quarter report. The company beat expectations on the top and bottom lines, while GMS of $3 billion also came in above expectations of $2.98 billion. Services revenue, which accounts for things like advertising, was an outsized sales catalyst during the quarter, growing roughly 21% year over year.
On a call with analysts, Etsy CFO Rachel Glaser pointed to the return of student loan payments in the fall, as well as the elimination of child tax credits, as factors that could stretch consumers’ wallets and weigh on GMS in the third quarter.
CEO Josh Silverman conceded that the macro environment “remains challenging.” The online marketplace, which is known for its handmade and artisan goods, benefited enormously from sales during the pandemic, as consumers embraced digital retailers in droves. Etsy saw its revenue triple in 2020, driven largely by sales of face masks.
“Over the last few years, Etsy has gone from a period where we grew tremendously with so many tailwinds at our back, to a period of stiff headwinds and uncertain macroeconomic conditions,” Silverman said. “Consumers continue to make very tough choices on where and how to spend their money, and we’re fighting hard to help our sellers get their share.”
Even Etsy isn’t immune to the AI craze that has captivated Silicon Valley. Silverman told investors on the call that Etsy has a “small but mighty” team of AI and machine learning experts that are working to deploy these technologies “in almost every customer touchpoint,” such as tools for sellers and shopping recommendations.
“We wouldn’t want to do anything that makes the site look homogenous or boring, though,” Silverman said. “So, we’re going to be very careful about that. And more listings doesn’t necessarily translate into more sales for Etsy. So if it’s useful for sellers, we’ll lean in.”
Jensen Huang, chief executive officer of Nvidia Corp., during the US-Saudi Investment Forum at the Kennedy Center in Washington, DC, US, on Wednesday, Nov. 19, 2025.
Stefani Reynolds | Bloomberg | Getty Images
In the weeks leading up to Nvidia’s third-quarter earnings report, investors debated whether the markets were in an AI bubble, fretting over the massive sums being committed to building data centers and whether they could provide a long-term return on investment.
During Wednesday’s earnings call with analysts, Nvidia CEO Jensen Huang began his comments by rejecting that premise.
“There’s been a lot of talk about an AI bubble,” Huang said. “From our vantage point we see something very different.”
In many respects, Huang’s remarks are to be expected. He’s leading the company at the heart of the artificial intelligence boom, and has built its market cap to $4.5 trillion because of soaring demand for Nvidia’s graphics processing units.
Huang’s smackdown of bubble talk matters because Nvidia counts every major cloud provider — Amazon, Microsoft, Google, and Oracle — as a customer. Most of the major AI model developers, including OpenAI, Anthropic, xAI and Meta, are also big buyers of Nvidia GPUs.
Huang has deep visibility into the market, and on the call he offered a three-pronged argument for why we’re not in a bubble.
First, he said that areas like data processing, ad recommendations, search systems, and engineering, are turning to GPUs because they need the AI. That means older computing infrastructure based around the central processor will transition to new systems running on Nvidia’s chips.
Second, Huang said, AI isn’t just being integrated into current applications, but it will enable entirely new ones.
Finally, according to Huang, “agentic AI,” or applications that can run without significant input from the user, will be able to reason and plan, and will require even more computing power.
In making the case of Nvidia, Huang said it’s the only company that can address the three use cases.
“As you consider infrastructure investments, consider these three fundamental dynamics,” Huang said. “Each will contribute to infrastructure growth in the coming years.”
Reversing the slide
In its earnings release, Nvidia reported revenue and profit that sailed past estimates and issued better-than-expected guidance. Last month, Huang provided a $500 billion forecast for sales of the company’s AI chips over calendar 2025 and 2026.
The company said on Wednesday that its order backlog didn’t even include a few recent deals, like an agreement with Anthropic that was announced this week or the expansion of a deal with Saudi Arabia.
“The number will grow,” CFO Colette Kress said on the call, saying the company was on track to hit the forecast.
Prior to Wednesday’s results, Nvidia shares were down about 8% this month. Other stocks tied to the AI have gotten hit even harder, with CoreWeave plunging 44% in November, Oracle dropping 14% and Palantir falling 17%.
Some of the worry on Wall Street has been tied to the debt that certain companies have used to finance their infrastructure buildouts.
“Our customers’ financing is up to them,” Huang said.
Specific to Nvidia, investors have raised concerns in recent weeks about how much of the company’s sales were going to a small number of hyperscalers.
Last month, Microsoft, Meta, Amazon and Alphabet all lifted their forecasts for capital expenditures due to their AI buildouts, and now collectively expect to spend more than $380 billion this year.
Huang said that even without a new business model, Nvidia’s chips boost hyperscaler revenue, because they power recommendation systems for short videos, books, and ads.
People will soon start appreciating what’s happening underneath the surface of the AI boom, Huang said, versus “the simplistic view of what’s happening to capex and investment.”
WATCH: Nvidia posts Q3 beat
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