Shopify (TSX:SHOP) has historically been a significant wealth creator for its shareholders. However, SHOP stock has recently faced pressure due to a combination of macroeconomic uncertainty, valuation concerns, and investor apprehension regarding the potential impact of artificial intelligence (AI) on the broader software industry.
Sentiment weakened further following the company’s fourth-quarter results, which showed a slowdown in top-line growth. Further, management’s lower-than-expected free cash flow margin projection for Q1 2026 weighed on the stock.
Given the decline, Shopify stock is currently trading approximately 36.5% below its all-time high of $253.10. Despite the decrease, Shopify’s fundamentals remain solid. Moreover, it has eased earlier valuation concerns. Further, the Canadian tech giant remains strategically positioned to benefit from the ongoing shift toward omnichannel commerce platforms.
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Factors supporting Shopify’s investment case
Shopify’s long-term investment outlook remains solid, supported by strong underlying fundamentals, even amid near-term uncertainties. In 2025, the company delivered robust operating performance, with gross merchandise volume (GMV) rising 29% to $378 billion and total revenue increasing 30% to more than $11.5 billion. Shopify’s solid financials reflect sustained demand for its platform. Moreover, Shopify is scaling its operations profitably.
Looking ahead, Shopify’s growth trajectory is supported by multiple catalysts. Existing merchants continue to expand their operations within the ecosystem, while the company is also onboarding new merchants at a steady pace.
Shopify’s Plus offering remains a key area of strength. Shopify continues to add merchants to its Plus platform through both upgrades from existing users and new enterprise-level clients. Notably, the increase in average GMV per Plus merchant indicates that Shopify is attracting higher-value merchants to its platform.
Payments remain a key growth driver for Shopify, with continued strength in this segment supporting overall performance. The increasing adoption of Shop Pay is driving transaction activity and deepening merchant engagement, contributing to higher platform utilization.
Additionally, Shopify is seeing significant momentum in its business-to-business (B2B) operations. GMV from B2B merchants rose 84% in the fourth quarter and 96% for the full year in 2025. Offline commerce has also delivered solid growth, with GMV increasing 29% in the fourth quarter.
Looking ahead, the company is well-positioned to benefit from developments in AI-driven commerce. Moreover, as Shopify expands into B2B and offline channels, these areas are emerging as important contributors to growth, diversifying its exposure across industries and business models.
Overall, Shopify’s unified platform integrates online storefronts, point-of-sale systems, marketplaces, B2B capabilities, cross-border functionality, and AI-driven interfaces within a single infrastructure. This integrated approach continues to support its long-term growth and competitive positioning.
Bottom line: Buy SHOP stock while it is trading cheaply
While Shopify stock has experienced a notable pullback from its peak, the company continues to deliver strong revenue growth, expand merchant adoption, and increase monetization across its ecosystem.
Shopify’s expansion into high-value enterprise clients through Shopify Plus, rapid acceleration in B2B commerce, and continued strength in payments and offline channels diversifies its revenue base while deepening its competitive moat. Further, Shopify’s integrated commerce platform and early positioning in AI-enabled retail workflows position the company to benefit from ongoing AI advancements rather than face displacement.
Further, Shopify’s current valuation, which is significantly below historical highs, offers a compelling risk-reward profile, making it a buy.
