We recently published a list of the 10 Best High Short Interest Stocks to Buy Now. In this article, we are going to take a look at where Etsy Inc. (NASDAQ:ETSY) stands against other high short interest stocks to buy now.
Aditya Bhave, BofA Securities head of US Economics, joined ‘Power Lunch’ on CNBC on April 17 to talk about whether tariffs are ultimately inflationary, disinflationary, or deflationary. Aditya Bhave responded that the impact depends on the magnitude of the uncertainty shock. He explained that tariffs are generally stagflationary, which means that they contribute to both inflation and economic stagnation. However, he also emphasized that it’s not just the content of the trade policy announcements that matters, but also the disruptive way in which these policies have been communicated, which has increased uncertainty for businesses. He noted that there is a scenario where the uncertainty caused by these policies could outweigh their stagflationary effects, making tariffs disinflationary instead. Bhave also referenced Fed Chair Jerome Powell’s recent hawkish remarks and drew a parallel to Powell’s stance during the 2021–2022 rate hiking cycle.
He highlighted Powell’s assertion that sustained full employment is not possible without price stability, which is a justification that Powell previously used for aggressive rate hikes even during a technical recession. Bhave believes the Fed is likely to maintain its focus on price stability and continue its current policy approach in the near term. Earlier during the COVID-19 pandemic, the Fed and Powell in particular, notably responded to tariff-induced supply chain disruptions by aggressively stimulating the economy. Bhave argued that this aggressive response came after and not during the initial supply chain disruptions, and that while the Fed may have acted a bit late, it ultimately raised rates sharply by 425 basis points in a single year. He does not expect the Fed to repeat such aggression, but believes that the case for holding rates steady is strong right now.
Our Methodology
We first sifted through stock screeners to find companies with a short interest between 10% and 25%. We then selected the 10 stocks that were the most shorted as of April 16, but at the same time were popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database, which tracks the moves of over 1000 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A young woman shopping for a vintage fashion item online.
Etsy Inc. (NASDAQ:ETSY)
Short % of Float As of April 16: 19.45%
Number of Hedge Fund Holders: 58
Etsy Inc. (NASDAQ:ETSY) operates two-sided online marketplaces that connect buyers and sellers worldwide. It operates through three segments: Etsy, Reverb, and Depop. It primarily operates the Etsy marketplace that connects artisans and entrepreneurs with various consumers. It also offers Reverb, which is a musical instrument marketplace, and Depop, which is a fashion resale marketplace.
The Etsy marketplace is central to the company’s growth, but it faced challenges in 2024, with GMS (Gross Merchandise Sales) declining by 8.6% year-over-year in Q4. For the full year, Etsy marketplace GMS was down 4% from 2023 and reached $12.6 billion for the consolidated entity. This underperformance is attributed partly to prioritizing longer-term customer experience improvements over near-term conversion-driving experiments.
Despite the GMS decline, the Etsy marketplace led a consolidated record revenue of $2.8 billion, which was up ~2% year-over-year. This was achieved through initiatives like Etsy Ads and consolidated payments. In Q4 alone, consolidated revenue increased by 1.2% year-over-year to a record $852 million. The company’s strategy for 2025 centers on focusing on Etsy Inc.’s (NASDAQ:ETSY) differentiation by emphasizing its unique selection of over 100 million creative goods.
Oakmark Global Fund stated the following regarding Etsy, Inc. (NASDAQ:ETSY) in its Q2 2024 investor letter:
“Etsy, Inc. (NASDAQ:ETSY) is a global marketplace for unique and creative goods that connects millions of buyers and sellers across the world. We first became interested in Etsy in 2017 when Josh Silverman took over as CEO and began transforming the company from a borderline nonprofit into a higher margin, faster-growing enterprise. The Covid-19 pandemic accelerated the company’s already strong fundamental results as millions of new customers flocked to the platform, but like many other Covid-19 beneficiaries, Etsy has since fallen deeply out of favor. In our view, investors today are too focused on the timing of Etsy’s return to growth and are ignoring the company’s positive long-term outlook. We believe the macro environment for Etsy’s product categories will eventually improve and Etsy is poised to benefit. At the same time, we believe Etsy’s continued push into international markets can provide a solid source of revenue growth for the long-term. After the recent sell-off, we were able to purchase shares at a discount to our estimate of intrinsic value.”
Overall, ETSY ranks 4th on our list of the best high short interest stocks to buy now. While we acknowledge the growth potential of ETSY, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ETSY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
