Shares of Shopify (TSX: SHOP) could be in for a wave of growth as the rise of agentic commerce becomes one of the hottest trends for online shopping since the rise of the internet. Undoubtedly, it’s quite amusing to envision chatting with a large language model (LLM) and getting things purchased without having to open up a web browser on your phone or hit any sort of button to complete a purchase. Indeed, the advent of one-click shopping now seems to be going down the path of zero-click buying and AI-enhanced product discovery.
And with that last bit of friction being eliminated, I think that there’s serious potential for merchants, especially those aboard the Shopify platforms, to really gain a leg up, perhaps over their much-larger rivals in retail. Indeed, when you’re interacting with a chatbot and not a digital storefront, perhaps the playing field stands to be evened across the e-commerce scene. Of course, the big-box retailers are going to have their own AI and agents to keep customers aboard their ecosystems.
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Shares of SHOP are under pressure (and for no good reason)
However, I think Shopify, which recently saw its market cap fall below the $200 billion mark amid a swift correction, stands to gain a lot more than critics and some analysts would give it credit for. Sure, the future is getting cloudy as AI and agents look to forever change the tech landscape. In a way, agents are every bit as impressive as LLMs were way back in 2023.
Once customers get their hands on agentic AI, I think shopping stands out as one of the biggest areas of transformation. Of course, there are going to be winners and losers as a new technology shifts the competitive battleground. Shopify, I think, has to be seen as one of the bigger winners, especially as the company goes heavy on AI and agentic technologies. Perhaps it’s time to think of Shopify as an AI shopping play rather than just a place to score a fancy dashboard and digital storefront.
With great collabs in place with some of the biggest, brightest mega-cap titans in tech, I view shares of SHOP as having what it takes to regain ground, perhaps on the back of a shockingly good quarterly result boosted by AI shopping tailwinds.
Of course, it’s tough to say exactly when agentic commerce will reach a peak (could a J-shaped ascent be on the table? It’s hard to tell), but it may be coming faster than investors are prepared for. With so many AI tools landing this year, AI is about to get useful, perhaps too useful, and in a concise timespan that’s enough to leave many a bit unsettled. Things are moving really fast, and things (notably software stocks) are breaking. But the companies themselves, I think, are ready for the rise of AI agents.
Shopify is positioned to win
Either way, agentic AI looks like a big win for Shopify, provided it can invest in the right places. Given the company’s focus on AI and agents, I think the runway is cleared. But will shares take off? That’s the trillion-dollar question. Either way, the nearly 40% plunge in shares over the AI-driven software scare seems overdone, especially given the monetization potential of AI shopping.
While 82.2 times trailing price to earnings seems like a high price to pay for Shopify, I think the premium is worthwhile given the growth jolt that could loom. Of all the software plays, I’m inclined to view Shopify as the best positioned as the world enters the agentic era.
