Shopify’s (SHOP) investment backdrop remains defined by the same push and pull—rate-cut momentum on one side, tariff overhang on the other. What has changed are the data points feeding into that debate. The August jobs report landed September 5th, inflation data followed on September 11th, and the Fed convenes tomorrow with a key rate cut now firmly priced in, setting the near-term macro stage. Against that timeline, I’ll outline what these signals mean and highlight the catalysts most relevant for SHOP in the coming week. Bottom line: my stance stays Bullish.
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Design Hires and Cross-Border Tools Doing Real Work
On the company front, the key themes remain talent and execution. On August 27, Shopify quietly acquired New York–based design studio Molly, integrating the team into a newly formed internal Product Design Studio. While a small tuck-in, the move is targeted squarely at reducing conversion friction—enhancing checkout design, enabling AI-assisted merchandising, and accelerating UI iteration ahead of peak season.
At the same time, the DHL integration we’ve been monitoring is becoming increasingly relevant in the current tariff overhang. The service is now live for U.S. and German merchants, with Canada slated for September and broader expansion through 2026. This creates valuable optionality if landed-cost dynamics remain volatile heading into peak season. Even incremental gains in cross-border label pricing and DDP workflows can materially improve conversion rates for SMBs on the platform.
Macroeconomic Background Casts a Wide Shadow
The August jobs report (released September 5th) showed total nonfarm payrolls +22,000, unemployment 4.3%. That’s a cool print, not a collapse. For Shopify’s merchants, softer labor reduces the odds of “higher for longer” rates, which eases working-capital pressure as they build holiday inventory. For the platform, it supports multiple as discount-rate anxiety fades.
Last week’s August CPI came in +2.9% YoY headline and +3.1% core. The month-over-month uptick was +0.4%, with shelter sticky and gasoline up 1.9%. That last bit matters because fuel surcharges filter into parcel rates, which is pretty much the line item many Shopify sellers feel first. The broader takeaway is that inflation is manageable but not “done,” so policy easing is likely cautious.
If you’re watching pipeline prices, August PPI (Sept. 10) actually fell 0.1% m/m, with services down 0.2%, which could prove a small positive for merchants’ input costs into Q4 if it persists.
Interest Rate Cut Incoming
Now, the markets expect the Fed to deliver a 25-bp cut this week, the first of 2025, with the committee split on how fast to ease. Political noise and tariff-driven price risks complicate the dots, so the tone of Powell’s press conference may matter as much as the cut itself.
For high-multiple names like SHOP, a modest cut paired with “we’re watching inflation” language can be a friendly outcome, in my opinion. Of course, that also means a hawkish pivot from here could bruise multiples even if fundamentals hold. According to CME FedWatch, markets are pricing in a 96% probability of a 25-basis-point cut in the Fed funds rate.
Policy Wild Card Sees Tariffs Head to the Supreme Court
This legal backdrop has shifted from a footnote to a headline. The Supreme Court agreed to hear challenges to the administration’s emergency-power tariffs in an expedited November session. Lower courts have already said most of these IEEPA tariffs are unlawful, but enforcement is stayed until mid-October while the government appeals.
Look, if the Court ultimately strikes them, analysts warn the government could face enormous refund exposure. But more importantly for Shopify merchants, landed costs would fall and pricing clarity would improve. If the tariffs stand, cross-border complexity persists into the holiday.
Valuation Sees Premium Price for Promised Growth
On consensus, SHOP changes hands around the high-70s on forward EPS and ~18–19x trailing sales, well north of software peers (the industry average forward P/E is roughly 32x). Therefore, the stock still needs clean execution and a friendlier rate path to defend the multiple.
Potential Macro Obstacles Hurtle Towards SHOP
Two catalysts arrive within 48 hours. First up, August Retail Sales hit Tuesday, and I’ll be watching the nonstore line as a quick GMV proxy. A resilient read would keep the “consumer holding up” narrative intact, though note that a miss would sharpen focus on holiday promos and take rates.
Then, the FOMC decision lands on Wednesday. A quarter-point cut paired with even-keeled guidance likely supports Shopify’s multiple and lowers working-capital friction for merchants. A stubborn dot plot or tough talk on services inflation would do the opposite.
Is Shopify a Buy, Sell, or Hold?
Wall Street remains relatively bullish on Shopify, with the stock carrying a Moderate Buy consensus rating based on 20 Buy and 13 Hold recommendations over the past three months. Impressively, not a single analyst rates the stock a Sell. In the meantime, SHOP’s average stock price target of $165.33 — relatively unchanged from last week — suggests ~14% upside from current levels.
Shopify’s Operating Cadence Holds as Tariff Risk Looms
I remain cautiously bullish on Shopify. While the COO’s departure could be viewed as a negative, the company’s operating cadence remains intact, with product/design initiatives and cross-border infrastructure progressing in the right direction. The macro backdrop is mixed—labor softening, CPI running slightly hot—but still consistent with an initial Fed cut. The tariff question remains the wild card, capable of either simplifying operations for merchants overnight or prolonging uncertainty.
Heading into this week’s data, I’m inclined to give Shopify the benefit of the doubt on demand durability and its ability to translate that into resilient GMV and take rates. Should Retail Sales disappoint or the Fed strike a more hawkish tone, I’ll shift focus to execution across multiple fronts, particularly conversion, international expansion, and B2B growth.