Shopify: Can It Catch Up in the AI Race?

Shopify (TSX:SHOP) stock is a great buy on weakness for its long-term AI prospects!

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With the Bank of Canada finally cutting interest rates for the first time in a number of years, investors may wish to consider some of the hyper-growth tech companies. As costs of borrowing come down, such firms will have more to spend on various forward-looking growth initiatives. Indeed, generative and predictive artificial intelligence (AI) applications and the hardware (GPUs or AI accelerators) that run them are incredibly expensive.

Not only that, but they could become somewhat scarce as plenty of firms look to get their orders ahead of their peers. Indeed, in the AI war, GPUs seem to be the not-so-secret weapon to gaining a slight edge over industry peers.

In this piece, we’ll check in with one of the best-positioned tech firms to take advantage of the so-called AI boom, race, revolution, or whatever you’d like to call it.

Shopify stock: A dazzling e-commerce growth stock that could really shine as rates fall and generative AI rises further

Enter Shopify (TSX:SHOP), an e-commerce darling that’s helped a great deal of digital merchants get up to speed with the latest and greatest technologies. In many ways, Shopify is the ultimate evener of the playing field, allowing small and medium-sized firms to attract business, even from big-brand behemoths with seemingly limitless cash reserves to spend on e-commerce.

As AI becomes embedded in almost every application we use in our daily lives, look for Shopify to really power the trend forward. And we’re not just talking about simple AI-generated product descriptions and image-editing tools, either. Shopify has an opportunity to help its merchants harness the full power of data analytics, something that the massive e-commerce juggernauts have been doing. Indeed, consumer data seems to be worth its weight in gold these days. When leveraged effectively, some serious financial and time-saving benefits stand to be enjoyed.

Indeed, Shopify can help merchants become more efficient every step of the way. Whether we’re talking about more efficient inventory management, AI-powered customer service, or super-smart marketing tools, the firm has so many growth pathways it can explore. And if the technologies save merchants time and money, you can bet they’ll be willing to pay higher subscription prices for more premium tiers.

Shopify stock: It’s not behind in the AI race. Arguably, it’s one of the leaders.

Shopify stock may not have as much momentum behind it as your average AI chip stock, with shares attempting to climb after suffering a horrid quarterly flop a few weeks ago. More recently, SHOP stock found itself on a nice winning streak, which extended seven straight sessions.

Indeed, the hot run seems to have indicated shares were beyond oversold following the latest quarterly reveal. Perhaps investors are warming up to Shopify as more of an AI play after the company acquired Checkout Blocks, a no-code checkout customization tool.

In the second half, Shopify could have room to acquire more startups in the realm of AI and no-code. Perhaps lower rates could help Shopify really get active on the M&A front! Either way, it’s hard not to love Shopify as it triples down on AI innovation to gain a leg up in this new (and still young) bull market.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

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