Shopify Can Win Big with AI Agents. Why it May Take Time.

Dow Jones
18 hours ago

Shopify, the e-commerce company, stands to win big with artificial-intelligence agents over time -- and investors have started to believe it.

The stock advanced 3.4% to $176.69 on Monday. It has risen nearly 11% this year, according to Dow Jones Market Data.

Shareholders were initially rattled by the prospect of AI agents when Meta Platforms launched its Muse on Sept. 8. That day, Shopify stock sank nearly 8% on fears that an onslaught of AI shopping agents would threaten the company's core business.

Since then, however, some Wall Street analysts have said that Shopify could become the go-to checkout engine for AI platforms.

On Monday, Deutsche Bank's Bhavin Shah reaffirmed his confidence in Shopify. He reiterated his Buy rating and $185 price target.

Shah wrote that the company remains in an "advantaged position" to benefit from Muse and other AI agents in the long run as it works to streamline its shopping experience and expand its online shopping market.

Features like Shop Pay and platforms like Muse, he added, make it easy for shoppers to discover independent sellers and buy directly in-chat.

Still, that advantage won't show up in the numbers right away.

Even though shares have surged 33% since Muse's launch a month ago, Shah cautioned that agentic commerce has had a "negligible" effect on merchant revenue. That could disappoint investors who were looking for financial upside in the short term, he added.

Nonetheless, Shah expects Shopify to deliver strong third-quarter earnings when it reports on Nov. 3. He projects that gross merchandise volume and revenue will modestly exceed Wall Street's estimates because of strong enterprise migrations and European demand. The numbers should also signal a slightly better-than-expected fourth quarter guidance, he wrote.

Last month, J.P. Morgan analyst Smilek wrote that Shopify's 20 years of proprietary merchant data, deep infrastructure, and in-house AI assistant, Sidekick, make it hard for any AI bot to replace the platform's core value to online stores.

Along with analysts, Shopify CEO Tobi Lutke has played a role in allaying investor worries about Muse. Lutke said last month the company has joined with Muse to "enable agentic checkout with Shop Pay on all Shopify stores."

The core anxiety was that consumer AI agents might erode Shopify's business, paving the way for Big Tech to introduce small business AI tools that build the e-commerce storefronts, create and run advertisements, handle payments, and catalog customer relationship management.

Of the 57 analysts polled by FactSet, 75% rate the stock Buy and 23% have a Hold rating. Since the launch of Muse, Shopify has received 19 price target increases.

 

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