Shopify (NASDAQ: SHOP) could be ready for a comeback after getting caught up in this year’s artificial intelligence-driven sell-off, according to Bernstein. The firm recently initiated coverage of the e-commerce software company with an Outperform rating and a $160 price target.

Shares have had a rough 2026, falling about 21% as investors pulled back from software stocks during the so-called “SaaSpocalypse.” The sell-off was fueled by concerns that rapidly advancing AI tools could eventually take market share from traditional software companies. Bernstein analyst Mark Shmulik thinks those fears may be overdone.

Bernstein Sees Shopify as an AI Winner

Shmulik describes Shopify as sitting at the intersection of three major technology markets: e-commerce, software and payments. In his view, AI could ultimately expand Shopify’s opportunity rather than threaten its business. AI is making it easier for entrepreneurs to launch companies, and those new businesses will still need tools to sell products, accept payments and manage their operations. That puts Shopify in a potentially favorable position.

Shmulik said Shopify is a company he would “circle” as one that could eventually be reclassified as an AI winner, rather than an AI victim. Recent results provide some support for that.

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Strong Results Give Investors More Confidence

Shopify’s latest quarterly report showed that the business continues to grow at a rapid pace.

Second-quarter revenue jumped 33.6% year over year to $3.58 billion, beating Wall Street expectations by about $140 million. The company also provided third-quarter revenue guidance above consensus estimates.

Gross merchandise volume, or GMV, climbed 32% to $115.6 billion, showing that merchants continued to move significant amounts of business through Shopify’s platform.

Other financial metrics were strong as well:

  • Monthly recurring revenue increased to $221 million, up from $185 million
  • Free cash flow reached $654 million, representing an 18% margin.
  • Operating income rose to $488 million, compared with $291 million a year earlier.
  • Net income increased to $1.50 billion, up from $906 million.

Shopify President Harley Finkelstein also pointed to AI as an opportunity for the company, saying that the technology is expanding what merchants can do through the platform.

Rosenblatt Is Bullish, Too 

Bernstein isn’t the only Wall Street firm taking a bullish position.

Rosenblatt also recently initiated coverage of Shopify with a Buy rating and a $175 price target. 

Analyst Scott Devitt called Shopify a dominant e-commerce software platform serving everyone from smaller merchants to major enterprise brands.

Rosenblatt also sees two areas of Shopify’s business as particularly underappreciated: B2B commerce and international expansion. Both could provide Shopify with additional room to grow as the company moves beyond its traditional base of online merchants. The firm also pointed to Shopify’s free cash flow generation and operating leverage as positives. As revenue continues to grow, the company has been able to convert more of that growth into cash flow.

AI Could Actually Strengthen Shopify’s Position

One of the more interesting parts of the Shopify bull case is the company’s push into agentic commerce, a future in which AI assistants help consumers discover products and complete purchases. Rosenblatt argues that even if AI changes how shoppers find products, those transactions will still need infrastructure to handle catalogs, payments and checkout.

Shopify is positioning itself to be part of that infrastructure. The company co-developed the Universal Commerce Protocol with Google, while its Shop Pay system provides a checkout layer designed to work within emerging AI-powered shopping experiences. In other words, AI may change the front end of shopping without eliminating the infrastructure underneath it.

So, What’s Next for Shopify?

Shopify expects third-quarter revenue to increase at a low-thirties percentage rate year over year. Gross profit dollars are expected to grow at a mid-twenties percentage rate. That means the company is still forecasting growth at a pace that would be impressive for a business of Shopify’s size. The bigger question for investors is whether the market will continue to view Shopify as a software company threatened by AI or as a beneficiary of the AI story.

Sincerely,

Ian Cooper