Shares in Canadian e-commerce firm Shopify (SHOP) plunged over 8% on Tuesday as analysts sent mixed signals with their latest ratings despite their upbeat views.
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Analysts back Shopify on Agentic Commerce
In their latest reviews, both Jefferies analyst Samad Samana and Arete analyst Rocco Strauss hailed Shopify’s agentic commerce positioning — that is, the commerce model when AI autonomously handles the task of making purchases on behalf of consumers or businesses. However, while Strauss upgraded his SHOP rating to a Buy, Samana stuck to his Hold rating and put forward a price target of $160, implying about 32% upside.
Samana pointed out that merchants are required to pay a 4% fee to use Shopify’s Instant Checkout feature on OpenAI‘s ChatGPT — the feature was born from Shopify’s deal with OpenAI announced in September.
The analyst noted that while this requirement has raised concerns about the profitability of the channel, Shopify “remains an agentic commerce beneficiary.” In particular, the analyst pointed to Shopify’s relationship with Alphabet’s (GOOGL) Google and Microsoft (MSFT).
“Beyond the economics, investors also want more clarity on the potential competitive risk following reports of Amazon (AMZN) investing in OpenAI,” Samana noted.
Analyst Expects ‘Solid’ Q4 Results from Shopify
Samana also gave a review of Shopify’s upcoming fourth-quarter results, noting that his team expects “solid” earnings and sees the platform’s gross merchandise value rising 28% year-over-year. This is slightly below the consensus of $121.4 billion, the analyst noted.
On his part, Strauss noted that he sees an attractive valuation for SHOP shares following the recent sell-off in the stock. The analyst argued that Shopify is poised for the rise of agentic commerce and that worries about AI coding tools eroding Shopify’s competitive “moat” fail to appreciate the “lock-in” the platform enjoys with its merchant base.
This view contradicts a recent one by Wolfe Research, which downgraded SHOP shares over valuation concerns, noting that Shopify’s potential for agentic commerce has already been factored into its stock price.
Is SHOP a Good Stock to Buy Now?
Across Wall Street, Shopify’s shares continue to hold a Moderate Buy consensus rating. This is based on 17 Buys and 10 Holds assigned by 27 analysts over the past three months.
At $179.56, the average SHOP price target indicates over 18% upside from the current trading levels.
