Seek (ASX: SEK) shares have sold off materially during 2026 on fears of disruption from artificial intelligence. We have analyzed the AI threat and revisited our thesis about Seek’s future market size and market share.

Why it matters: Market enthusiasm for AI has accelerated throughout the year and has had an inverse impact on many other sectors, including online job boards. However, while Seek shares have nearly halved, shares in Recruit Holdings, which owns www.indeed.com, have risen by nearly 25%.

  • Although Recruit is much larger than Seek and owns other businesses, we believe Seek and Recruit should be affected similarly by AI and should trade accordingly. Given the wide dispersion between the two, we think the market must be drastically wrong about one or the other.
  • We think it is Seek that the market is wrong about. We think AI represents no discernible downsides to online job boards, while providing significant new opportunities and capabilities to create more value for customers, which it can monetize.

The bottom line: We maintain our fair value estimate for narrow-moat Seek of $25 per share. Following a nearly 60% decline since their peak last year, shares now screen as materially undervalued, at around half our fair value estimate.

  • We assume a 10% CAGR in earnings per share for our explicit 10-year forecast period, primarily driven by higher revenue per ad as the company monetizes its improving matchmaking capabilities.
  • It trades on a price/underlying earnings ratio of 25 and a forward dividend yield of 4%, which we think represents a rare opportunity to own an undervalued technology company with still-strong long-term growth potential and an above-average dividend yield.

AI will benefit Seek’s matchmaking capabilities

We expect Seek’s near- and medium-term challenges to center on navigating the impact of artificial intelligence on the job-matching process.

We believe the launch of ChatGPT and subsequent large language models will be highly impactful on the job matchmaking process. Job seekers have become a lot more efficient in writing motivation letters and tailoring their CVs. This is leading to a deluge of job applications for hirers. Also, job seekers may try to use ChatGPT and other AIs for discovering job vacancies, rather than using Seek’s marketplace.

We believe Seek, and other online employment marketplaces, will increasingly need to assume an active role in prescreening candidates for hirers and vacancies for job seekers. On balance, we expect this to be a tailwind for the company, as it can use large language models to provide better matches between both sides of the marketplace. We don’t expect disruption, as it has proprietary data about what provided good matches in the past, such as historical application and hiring data.

In the medium- to long-term, we expect Seek’s core strategic focus to revolve around protecting its ANZ business from competitive pressure, especially from Microsoft-owned LinkedIn. LinkedIn has rapidly taken market share in the past decade, and challenges Seek in the high-end of the market. Indeed, owned by Recruit Holdings, competes in the lower end and middle of the market. Therefore, we believe Seek will continue innovating to improve the core function of its platform, which is to serve as a matchmaker between supply and demand for employment. Supported by network effects established as a first mover, we believe Seek will remain the dominant online listing platform for employment in ANZ.

Bulls say

  • Seek is the largest online listing platform for employment in Australia and New Zealand and is protected by network effects.
  • Seek enjoys near-universal unprompted brand recognition in Australia, which should further protect its market share.
  • Seek’s offers the lowest friction method for active job seekers to search for a suitable job listing due to its highly intuitive, performant, and feature-rich platform.

Bears say

  • The employment market is inherently highly fragmented, preventing Seek from consolidating the market meaningfully.
  • Microsoft-owned LinkedIn has natural advantages for connecting employers and job seekers and has rapidly taken market share in Australia and New Zealand in the past decade.
  • Seek’s overseas expansions have disappointed, including the recent divestitures from Latin America, and may continue to disappoint.