What happened

Shares of Facebook (META -5.61%) have popped to all-time highs today, up by 6% as of 12:45 p.m. EDT, after Wall Street analysts expressed optimism about yesterday's news that the social media juggernaut is rolling out Shops, its biggest e-commerce move yet. The announcement comes as COVID-19 has created a surge in e-commerce demand.

So what

Facebook Shops will allow small businesses to create online storefronts on Facebook and Instagram, with experienced third-party e-commerce platforms helping the power back-end infrastructure. The social networking tech giant has flirted with e-commerce in various ways over the years, but Shops is Facebook's broadest push to date.

Three smartphones displaying the Instagram Shop interface

Image source: Facebook.

Small businesses are being disproportionately impacted by the coronavirus outbreak, and Facebook is hoping to help them transition to online sales as people stay home. Shops can be set up for free, with Facebook monetizing the feature through ads and fees if a seller chooses to use Facebook's optional checkout system.

Now what

Deutsche Bank released a bullish note on the move, arguing that Shops will dramatically increase Facebook's e-commerce opportunities.

"We see the broader deployment of more advanced e-commerce solutions meaningfully expanding the potential revenue opportunity beyond our initial estimate from a year ago that Instagram Checkout could be a $10 billion revenue [opportunity] in a bull case," analyst Lloyd Walmsley wrote in a research note to investors. The analyst now estimates that Facebook Shops could translate into a $30 billion business.

J.P. Morgan analyst Doug Anmuth believes Shops will help drive "incremental ad dollars." BofA analyst Justin Post estimates that a 10% increase in e-commerce activity translates into $1.5 billion in additional ad revenue.