{"id":15626,"date":"2025-07-22T14:39:10","date_gmt":"2025-07-22T14:39:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/15626\/"},"modified":"2025-07-22T14:39:10","modified_gmt":"2025-07-22T14:39:10","slug":"shopifys-ai-strategy-its-biggest-potential-driver-of-profitability-analyst","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/15626\/","title":{"rendered":"Shopify\u2019s AI strategy its \u201cbiggest potential driver of profitability\u201d: Analyst"},"content":{"rendered":"

\"Tobias In April, Shopify CEO Tobi L\u00fctke shared an internal memo<\/a> on X, stating that \u201creflexive AI usage is now a baseline expectation at Shopify.” (AP Photo\/Richard Drew) \u00b7 ASSOCIATED PRESS <\/p>\n

Canadian e-commerce giant Shopify (SHOP.TO<\/a>) is showing resilience as Canadian tech stocks trail their U.S. counterparts. Analysts cite the company\u2019s push to Artificial Intelligence (AI) and strength in e-commerce as key drivers of its growth.<\/p>\n

\u201cSo far, 2025 has not been a banner year for Canadian technology,\u201d said Richard Tse, an analyst at National Bank of Canada Financial Markets, in a report.<\/p>\n

The S&P\/TSX Information Technology Index provided a return of 5.6 per cent in the first half of the year, lagging broader benchmarks like the S&P 500 Information Technology Index and the NASDAQ 100, which returned 7.7 per cent and 7.9 per cent respectively, Tse said. In comparison, Shopify provided a return of approximately 8 per cent in the first half of 2025, according to National Bank.<\/p>\n

National Bank, CIBC and RBC analysts consider Shopify a \u201cbuy,\u201d primarily because of its investment in AI and merchant solutions.<\/p>\n

\u201cThe most notable broad driver of growth and innovation for Shopify is from AI \u2013 its application both internally and for its merchants. In our view, this is by far the biggest potential driver of profitability for Shopify care of operating leverage,\u201d Tse said.<\/p>\n

Shopify CEO Tobi L\u00fctke has been outspoken about the company\u2019s AI ambitions. In April, he shared an internal memo<\/a> on X, stating that \u201creflexive AI usage is now a baseline expectation at Shopify,\u201d and teams must demonstrate why they can\u2019t accomplish tasks via AI before asking for more staff or resources.<\/p>\n

In May, the Canadian Press reported<\/a> that Shopify iss leaning into AI to support its merchants and developers with everything from online store creation to virtual shopping assistants.<\/p>\n

The company called its new product launches and enhancements a shift toward \u201cdeclarative commerce \u2014 where business owners simply express their goals, and AI handles the rest.\u201d<\/p>\n

Beyond AI, Shopify is scaling its merchant solutions, such as payments. In 2025, Shopify expanded payments from 23 to 39 countries.<\/p>\n

Further, Tse expects a potential Shop Pay partnership with OpenAI, and Shopify powering purchase transactions, could add $500 million in net revenue a year.<\/p>\n

RBC Capital Markets analyst Paul Trieber noted that Shopify is \u201ca key beneficiary of the transition to next generation commerce,\u201d as more businesses shift from traditional retail to online platforms and adopt multi-channel strategies, including marketplaces and social commerce. In a note, Treiber forecasts Shopify\u2019s gross merchandise value will rise from $292 billion in fiscal 2024 to $423 billion by 2026.<\/p>\n

CIBC Capital Markets analyst Todd Coupland also points to Shopify\u2019s growing merchant base as a sign of future strength. As of the fourth quarter of 2021, Shopify counted two million merchants on its platform. As of its fourth quarter in 2023, 25 million were either in Shopify\u2019s sales pipeline or on free trials.<\/p>\n

While U.S.-China tariff tensions were flagged as a potential threat, analysts see limited impact on the company\u2019s growth trajectory so far. \u201cWhile tariffs remain a key risk, Shopify is well positioned to help its merchants navigate those challenges,\u201d Coupland said.<\/p>\n

\u201cIt\u2019s notable that if a reasonable China tariff agreement is reached, estimates for the second half of 2025 could be conservative, as they assume a deceleration in growth. We reaffirm our positive thesis on Shopify and recommend investors buy its shares,\u201d Coupland said.<\/p>\n

CIBC and RBC have raised their price target on Shopify to US$145, up from US$125, while National Bank increased its target to US$140 from US$120.<\/p>\n","protected":false},"excerpt":{"rendered":"In April, Shopify CEO Tobi L\u00fctke shared an internal memo on X, stating that \u201creflexive AI usage is…\n","protected":false},"author":2,"featured_media":15627,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,276,277,49,48,13834,13833,13830,13832,13831,61],"class_list":["post-15626","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-ca","tag-canada","tag-cibc","tag-information-technology-index","tag-national-bank","tag-richard-tse","tag-shopify","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/15626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=15626"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/15626\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/15627"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=15626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=15626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=15626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}