Shopify (TSX:SHOP) stock has been incredibly volatile over the past two years. And while there have been steep ups and downs, sticking by the e-commerce darling has been a fairly wise decision, with shares now up around 80% in the past two years. Of course, if you bought way back in 2021, you’re probably still in the red on your position. As the stock continues its choppy ascent, though, I think it’s not too far-fetched to envision the name making new highs, thanks in part to its role in the artificial intelligence (AI) boom.
Not many stocks have what it takes to recover from a more than 82% crash from peak to trough. Today, shares of SHOP are down around 32% from their 2021 peak levels. And with the company recently unveiling new AI features, I’m inclined to stand by the name, even as the next wave of volatility strikes the high-multiple growth stocks. Arguably, any further bumps on the horizon ought to be viewed as opportunities for long-term investors to start looking for an entry point.
Shopify triples down on AI
In a number of prior pieces, I’ve highlighted Shopify’s AI edge and how it could leverage the technology to continue its growth over the next five years and beyond. Indeed, Shopify Magic, Sidekick, and other AI productivity solutions seemed to be a perfect fit for an e-commerce firm that still had what it took to take a considerable share in a colossal market. With the company recently delivering new AI announcements, I couldn’t be more bullish on the firm’s growth prospects, even as the stock sags in sympathy with the rest of the market (SHOP stock plunged more than 4% on Wednesday’s wobbly sessions).
So, what was most interesting at the latest AI summer showcase?
Its new AI-focused “Horizon” theme architecture looked impressive, as did the added generative AI (conversational) tools that may change the game for Shopify and its merchants. Of course, this is likely just the start of a broader AI push as the firm looks to level up its disruptive capabilities. As we move into the agentic AI era, it’ll be very interesting to see what Shopify’s take will be. In any case, the recent pullback in Shopify shares, I believe, is completely unwarranted and has more to do with the return of fear on Wall and Bay Street after a pretty heated run off the market’s April lows.
Perhaps patient growth investors will get another shot to pick up the stock below the $120 per-share range again. The market still seems rattled by that big U.S. credit downgrade and the ensuing rise in U.S. bond yields. Add the lingering tariff overhang into the equation, and I do think there is a high chance of being able to pick up Shopify stock at lower levels, even in light of its new AI features.
The bottom line
Shopify is an AI winner, and its latest announcements seem to be mostly discounted by a market that’s starting to get a tad too fearful again. Long-term investors may wish to watch the name closely as the tech relief rally runs out of steam. The near and medium term are sure to be volatile, but I’d be willing to bet the stock will be at new highs in three years’ time as the firm continues to stay on the cutting edge of AI.
