Is Now the Time to Buy ACV Auctions, eBay, and Upwork as Rate Cut Expectations Lift the Market?

The Federal Reserve's pivot toward easing monetary policy in 2025 has reignited investor interest in growth stocks, particularly those in sectors poised to benefit from lower borrowing costs and improved consumer spending. As rate cut expectations gain traction, companies like ACV Auctions (ACVA), eBay (EBAY), and Upwork (UPWK) are attracting attention for their unique positioning in e-commerce, freelance services, and auction markets. This article evaluates whether these stocks represent compelling long-term opportunities amid a shifting macroeconomic landscape.

ACV Auctions: A High-Growth Play on Automotive Disruption

ACV Auctions, a digital platform for vehicle remarketing, has emerged as a standout in the auto industry's digital transformation. Despite a trailing P/E ratio of -25.32 (reflecting current losses), the company's forward P/E of 33.60 and P/S ratio of 2.65 suggest optimism about its revenue growth trajectory. Analysts project a 21.12% compound annual growth rate (CAGR) over five years, driven by its dominance in the $120 billion auto auction market and AI-powered valuation tools.

The company's net cash position of $76.63 million and strong free cash flow generation provide a buffer against near-term losses, while its 13 analyst “Strong Buy” ratings highlight confidence in its long-term potential. However, ACV's beta of 1.69 underscores its volatility, making it a speculative bet for investors comfortable with short-term swings.

Sector Tailwinds: The automotive sector is accelerating its shift to digital platforms, with ACV's B2B model capturing a growing share of dealer inventory. Fed easing could further boost demand for used vehicles, as lower interest rates make financing more accessible.

eBay: Navigating AI-Driven Growth Amid Valuation Concerns

eBay's Q2 2025 results highlight a mixed picture: a 4% revenue increase and 16% non-GAAP EPS growth, coupled with a trailing P/E of 19.39 and P/S of 4.14. While these metrics suggest a premium valuation, the company's 21.38% operating margin and $19.5 billion GMV growth (driven by AI-enhanced personalization and live commerce) justify some optimism.

However, eBay's P/B ratio of 8.76 and insider selling by top executives raise questions about whether the stock is overvalued. The company's strategic reinvestment in AI, while critical for long-term competitiveness, could temporarily pressure margins.

Sector Tailwinds: eBay's global network of 130 million buyers and 20 million sellers positions it to benefit from e-commerce tailwinds. A Fed easing cycle could further stimulate online retail activity, particularly in collectibles and luxury goods, where eBay has seen strong demand.

Upwork: Profitability and AI-Driven Freelance Expansion

Upwork's Q2 2025 performance stands out for its profitability: a 17% profit margin and 29.3% adjusted EBITDA margin, with revenue up 1% to $194.9 million. The company raised full-year guidance to $765–$775 million, reflecting confidence in its AI-powered platform (Uma™) and recent acquisitions of Bubty and Ascen. These moves aim to tap into the $650 billion enterprise talent market, a strategic shift that could unlock new growth avenues.

Upwork's stock repurchase program and $291.1 million cash balance signal management's conviction in its valuation. With a long-term adjusted EBITDA margin target of 35%, the company appears well-positioned to balance growth and profitability.

Sector Tailwinds: The freelance economy is expanding rapidly, with AI tools enhancing productivity and reducing hiring friction. Lower interest rates could further boost small and medium-sized businesses (SMBs), which are key clients for Upwork's Business Plus offering.

Institutional Interest and Macro Tailwinds

Institutional investors have been net buyers of U.S. tech stocks in Q2 2025, with allocations to equities surpassing year-start levels. This trend aligns with the Fed's cautious approach to rate cuts, as markets anticipate lower borrowing costs to stimulate growth. For ACV, eBay, and Upwork, this environment could amplify their sector-specific advantages:

• ACV Auctions: High-growth potential in a fragmented market, supported by AI-driven efficiency.
• eBay: Resilient e-commerce platform with AI-driven user engagement, though valuation risks persist.
• Upwork: Profitable expansion into enterprise services, leveraging AI to scale freelance solutions.

Investment Thesis and Entry Points

• ACV Auctions: A speculative buy for investors seeking high-growth exposure. The stock's 68.89% analyst price target upside justifies a long-term position, but volatility requires patience.
• eBay: A cautious buy, with a focus on its AI-driven GMV growth and strong margins. Investors should monitor insider activity and valuation multiples.
• Upwork: A strong buy for its profitability and strategic AI integration. The company's enterprise expansion and margin targets make it a compelling long-term play.

Conclusion

As the Fed inches closer to rate cuts, growth stocks in e-commerce, freelance services, and digital auctions are gaining traction. ACV Auctions, eBay, and Upwork each offer distinct advantages: ACV's disruptive potential, eBay's global scale, and Upwork's profitability. While valuation concerns exist for eBay and ACV, their sector-specific tailwinds and institutional backing make them worth considering for a diversified growth portfolio. Investors should prioritize Upwork for its balance of growth and profitability, while ACV and eBay require closer scrutiny of their execution risks.