What's Next For The Online Economy In 2025

The S&P 500 is at an all-time high. Tech stocks like NVIDIA Corporation (NVDA) and Alphabet Inc. (GOOG) have all hit all-time highs in the past six months.

Despite the uncertainties brought about by the tariff wars and other geopolitical events, AI has generally been a blessing for the tech investor.

But does it make sense to carry this optimism forward to all the other technology sectors? This article analyzes the current standing of various publicly traded companies in the online economy and how they are expected to fare over the next several months.

SaaS Industries: Innovation or Implosion?

According to a McKinsey report, Software-as-a-Service (SaaS) is a globally $3 trillion industry that is expected to hit $10 trillion by 2030. Some of the major SaaS categories today include CRM, ERP, eCommerce, cybersecurity, and other enterprise business management suites.

A lot of these business categories are being actively disrupted by AI and are likely to witness churn over the next several years. 

AI in Customer Support: Hype vs. Reality

AI agents are expected to play an increasingly prominent role in the areas of customer service and engagement. 

One of the biggest players in this segment is Zendesk Inc. which has completely pivoted from its traditional helpdesk suite to AI-agent customer support. After delisting from the NYSE in 2022, Zendesk acquired Ultimate, a German startup using artificial intelligence for customer service. 

Other competitors like Freshworks Inc. FRSH are pivoting to AI-first solutions.

Investor Pressures and the AI-First Pivot

A lot of this evolution is driven by investor pressure to reinvent these companies in the age of AI. But as a Gartner report recently found, 64% of customers would prefer companies not to use AI for customer service. 

This leaves the market open for the relatively smaller players like Jitbit and Zoho to thrive. While Jitbit too recently introduced AI agents to their features list, the core offering continues to be traditional SaaS and on-desk support software solutions.

Long-term investment in the SaaS space would be driven by the core value delivered by AI, and whether end-customers would adapt to the AI-first approach that is championed by the market leaders today.

The Creator Economy: Thriving or Threatened?

The creator economy is poised for big disruption due to Artificial Intelligence (AI). A lot of content production can today be automated with the help of AI.

B2C Resilience: YouTube, Instagram, and the Power of Influence

Social media behemoths like YouTube, Instagram, and Etsy Inc. ETSY shall continue to thrive in the face of AI. Other emerging areas of the creator economy, like eSports and livestreaming, that are relatively less resistant to AI disruption, are also expected to thrive. 

A recent study published by Whop found that eSports is expected to be a $2 billion revenue market in 2025. This continues to be one of the prime ‘side hustles' among the Gen Z generation, with entry-level professionals earning over $100 per hour. 

While the future of the creator economy appears bright in the B2C segment, the same cannot be said for other businesses in the B2B space. 

B2B Pressures: Fiverr, Upwork, and the GenAI Disruption

Two stocks worth following are Fiverr International FVRR and Upwork Inc. UPWK, which let businesses hire freelance contractors for online projects, including SEO, content production, and programming. 

These are services that are being actively disrupted by GenAI tools like ChatGPT, Claude, and MidJourney. As these technologies get better, the creator economy marketplaces like Fiverr and Upwork could witness challenges with respect to customer acquisition.

Fiverr is navigating this challenge with the launch of Fiverr Go, an AI model trained by its freelancers. As a market leader, Upwork is relying on its larger pool of high-ticket employers to thrive. 

In May this year, Upwork changed its service fee from a flat 10% to a variable structure ranging between 0% and 15%. The rationale behind this move is to incentivize businesses with high-ticket projects to benefit from lower fees, while making up for it through higher fees for smaller projects.

However, increasing service charges may not be viable for the long term. Loss of income due to high service fees can be attributed to the growth of digital creator platforms that charge relatively lower fees from its creators.

Also, since platforms like this are preferred by creators with stronger social networks, this poses a risk to freelance marketplaces like Upwork that rely on strong freelancer credentials to stay relevant.

ECommerce and AI Race

ECommerce is one of the biggest contributors to the online economy. The largest players in the eCommerce platform space include Shopify Inc. (SHOP) and BigCommerce Inc. (BIGC).

In the last 10 years, Shopify has grown at an average annual rate of 47.96%, cementing itself as a leader in the segment. 

Given the near permanence of eCommerce, this industry appears to be safe from the AI onslaught. Both Shopify and BigCommerce have introduced AI-enabled features like Shopify Magic and AI Store Builder to their suite.

However, the eCommerce ecosystem could be ripe for disruption from AI. The Shopify and BigCommerce app ecosystem has enabled thousands of businesses to symbiotically thrive and grow over the years. 

Their leadership could be disrupted by nimble AI-driven apps that ship features faster and are cheaper because of low overheads.

According to Dave Lavinsky, business strategy expert and founder of PlanPros, an AI-based business plan generator provider, a lot of these uncertainties driven by AI are unlikely to cause long-term impact on the success of these organizations. He says that businesses are actively reassessing their business plan and the future direction of the industry. 

Digital Marketing Economy

The digital marketing industry is one of the most vulnerable to advances in AI. Alphabet Inc. (GOOG) has made major changes to the Google.com online search platform that bring Generative AI-based answers to the forefront. 

The more recently launched AI Mode on Google will allow search users to deploy AI agents to search and execute tasks on their behalf.

Big improvements are also afoot in the online advertising space, with both Google and Meta Platforms Inc. (META) introducing AI-driven features in advertising. 

These changes are likely to steadily erode the value of several digital marketing activities, including SEO and PPC. While it is difficult to assess the long-term impact of these changes, the market is volatile for businesses offering these services, including marketing software companies like Semrush Holdings Inc. (SEMR) and Similarweb Ltd. (SMWB).

Investing Strategy Forward

As AI changes industries, the offerings will evolve as well, and markets should reach a point of equilibrium over the next couple of years. However, while this philosophy may work for ETFs and Indices targeting such sectors, the fortunes of specific stocks may still hinge on the leadership at these organizations and how they steer the ship forward.

It may be a wise move to trade based on technicals that are likely to hold over the short and mid-term timeframes. However, for people seeking a long-term investment horizon, the uncertainties and volatility of this industry make it an unappealing prospect, at least for the next 6-12 month period.