We’ve heard a great deal about the rise of generative artificial intelligence (gen AI) in recent years. The buzz isn’t going away soon, at least in my opinion. In fact, we may hear more about the gen AI plans of the everyday firms that may already lie in our TFSA (Tax-Free Savings Account) portfolios, as gen AI and other innovations look to translate into some form of cash flow.
You see, it’s one thing to have an impressive technology. But it’s another to have it actually work its way into the cash flow statement. Indeed, the many years of low rates have made profitability a “nice to have.” But with higher rates, profitability matters nowadays, and it’s no longer good enough to have zero plans to turn a profit, regardless of how incredible a technology is.
Indeed, higher rates may be a good (sustainable) thing for the tech firms investing so heavily in development. And though rates are probably on the way down from here (on both sides of the border), I’m not so sure the big spenders of gen AI technologies will go back to the days of inefficiency. Not after the past year (and counting) of efficiencies!
Shopify: All the makings of a gen AI winner?
In this piece, we’ll check out one homegrown technology firm that I think could rise off the back of gen AI and the rise of extended reality (XR) or mixed reality (MR). Indeed, that firm is Shopify (TSX:SHOP), an e-commerce company that’s been as popular as it’s been dominant in the smaller corners of its market.
Though it has a Shopify Plus offering for the heavier weights, I still think that the small- and medium-sized business (SMB) has more than enough runway to help the firm keep its growth rate elevated for many years to come.
And once it really starts going after international prospective SMB clients, various analysts covering shares of Shopify may need to factor in just how powerful the firm’s long-term growth story could be if it can replicate success in new geographies.
My take on SHOP stock?
If Shopify continues to innovate, success (and growth) will follow. The company seems to be serious about beefing up its gen AI offerings, like Shopify Magic — a suite of AI tools I went into detail on in a prior piece covering Shopify and its AI edge.
Apart from Shopify Magic, which has ample tools to help merchants, the company’s Shopify Sidekick also holds tremendous promise.
Personally, I think Sidekick, a conversational assistant powered by AI, could have the most potential for the firm over the long haul. Think of it as a ChatGPT, Claude, Gemini, or Mistral AI custom-tailored for digital stores. Every hero needs a sidekick. And Shopify merchants, I believe, will be more effective with the ever-improving AI at their side.
Bottom line: Shopify stock’s an AI stock
With Magic and Sidekick, Shopify is an AI company that’s every bit as capable as the ones that receive more press, in my opinion. Over the coming years, I expect Shopify’s AI talent and toolkit will become even better as the firm looks to gain ground over its fierce peers in e-commerce. AI is a powerful weapon. And thus far, it looks like Shopify is making good use of it!
