Investing.com -- eBay Inc (NASDAQ: EBAY) shares surged 5.5% in late morning trading on Monday after Morgan Stanley elevated the e-commerce giant to its top pick in the internet sector, citing an underappreciated structural driver behind the company’s recent momentum. The investment bank raised its price target on the stock to $132 from $127, pointing to the explosive growth of Western live commerce as the hidden force accelerating gross merchandise volume.

In a note led by analyst Nathan Feather, Morgan Stanley argued that the rapid emergence of live streaming auctions has transformed trading dynamics on the platform. The bank estimates that live commerce is currently responsible for over 40% of eBay’s growth in gross merchandise volume, acting as a crucial catalyst that had previously eluded market consensus.

The core of Morgan Stanley’s thesis rests on the evolution of Western live shopping, which has expanded more than fivefold to a $27 billion market over the past two years. Unlike the Asian model dominated by influencer broadcasts of bulk goods, the Western landscape operates more like a digital auction house for secondary and collectible goods, significantly increasing transaction velocity.

According to survey data cited by the firm, nearly 80% of live commerce buyers actively resell items, creating a hedge-fund-like trading ecosystem that continuously recycles inventory back onto eBay’s marketplace. This liquidity flywheel generates growth through direct live streams, accelerated product circularity, and broader platform discovery across core categories such as fashion and collectibles.

Looking ahead, Morgan Stanley projects that live-influenced merchandise volume could contribute approximately four percentage points to annual growth through 2030. That contribution alone nearly matches current market consensus expectations for total volume expansion, providing a significant margin of safety for long-term estimates.

Beyond top-line momentum, the firm indicated that operating profit expectations have likely bottomed following recent strategic investments in platform initiatives and acquisitions like Depop. With market share gains compounding and margin pressure easing, Morgan Stanley outlined a path toward sustained double-digit earnings growth and potential valuation multiple expansion.

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