Shopify SHOP shares have surged 55.6% in the past three months, outperforming the broader Zacks Computer and Technology sector’s return of 4.9%. This outperformance reflects strong investor enthusiasm surrounding its accelerating e-commerce growth, expanding artificial intelligence (AI) capabilities, increasing payments penetration and improving profitability. The company’s prospects are expected to benefit from AI-driven commerce, strong merchant engagement and an expanding international footprint. So, what should investors do with the stock? Let’s find out.
SHOP’s Growing AI Prowess to Steer Off Competition
Shopify is facing stiff competition from the likes of Amazon AMZN, Wix.com WIX and Commerce.com CMRC. Amazon’s services, such as Buy with Prime, Amazon Multi-Channel Fulfillment and Amazon Pay, enable merchants to sell both on and off Amazon while leveraging its fulfillment network and checkout technology. Wix competes with Shopify by providing an all-in-one platform that combines website creation, online stores, payments, booking, marketing and AI-powered business tools. Commerce.com offers cloud-based software for building online stores, managing product catalogs, processing payments, supporting omnichannel selling and serving both B2C and B2B merchants.
In terms of share price performance, over the past three months, Wix shares have outperformed Shopify, while shares of Commerce.com and Amazon have outperformed. Wix, Commerce.com and Amazon returned 61.3%, 39%, and 12.3%, respectively.
SHOP Stock’s Price Performance
Image Source: Zacks Investment Research
Nevertheless, Shopify’s expanding AI capabilities are expected to help the company steer off competition. The company is positioning itself as an essential infrastructure provider for AI-driven commerce through its Catalog, Universal Commerce Protocol and partnerships with OpenAI, Google, Meta and Microsoft.
The company's Catalog structures data for more than one billion products, enabling AI agents to access accurate product descriptions, pricing and inventory information. AI-driven traffic and orders to Shopify stores tripled year over year in the second quarter of 2026, while new-buyer order rates from AI channels were roughly twice those of other channels. As AI assistants become increasingly important shopping channels, Shopify is expected to benefit from additional merchant discovery, higher conversion rates and increased transaction volumes.
SHOP’s Prospects Ride on Payments Penetration
Meanwhile, Shopify Payments represents one of the company’s most compelling revenue growth catalysts. In the second quarter of 2026, Merchant Solutions revenues rose 37% year over year to $2.78 billion, supported by strong Gross Merchandise Volume (GMV) and higher payments penetration.
Shopify Payments penetration reached 68% of global GMV, increasing three percentage points year over year. The company expanded payment availability to 40 countries, including the United Arab Emirates, while European penetration increased more than 350 basis points. Shop Pay GMV grew 53% year over year, supported by wider availability of local payment methods, improved checkout experiences and financing options.
Increasing payment penetration allows Shopify to monetize a larger proportion of existing merchant transactions, thereby supporting sustained Merchant Solutions revenue growth. Shopify’s GMV advanced 32% year over year to approximately $116 billion in the second quarter, marking its fifth consecutive quarter of growth exceeding 30%. Management highlighted that merchants generating between $2 million and $25 million in annual GMV continue to contribute the largest incremental GMV, primarily as existing merchants scale their businesses.
SHOP’s Q3’26 Earnings Estimates Revisions Are Positive
The Zacks Consensus Estimate for SHOP’s third-quarter earnings is currently pegged at 45 cents per share, up by a penny over the past 60 days and indicating year-over-year growth of 32.35%. The consensus mark for third-quarter revenues is pegged at $3.74 billion, suggesting 31.33% year-over-year growth.
Shopify Inc. Price and Consensus
Shopify Inc. price-consensus-chart | Shopify Inc. Quote
The Zacks Consensus Estimate for SHOP’s 2026 earnings is currently pegged at $1.89 per share, unchanged over the past 60 days and indicating year-over-year growth of 61.54%. The consensus mark for 2026 revenues is pegged at $15.19 billion, suggesting 31.46% year-over-year growth.
SHOP Shares Are Trading at a Premium
Shopify shares are trading at a premium, as suggested by a Value Score of F.
In terms of the forward 12-month price/sales (P/S), SHOP is currently trading at 12.33X compared with the broader sector’s 5.72X. Shopify shares are pricey compared with Amazon, Wix.com and Commerce.com. Shares of Amazon, Wix.com and Commerce.com are trading at P/S multiples of 3.05, 1.86 and 0.90, respectively.
SHOP Stock’s Valuation
Image Source: Zacks Investment Research
Conclusion: Is SHOP Stock Still a Buy?
Shopify’s expanding AI capabilities, increasing payments penetration and robust GMV growth are expected to sustain its strong growth momentum. The company's expanding international presence and positive earnings estimate revisions further strengthen its prospects. Although stiff competition and premium valuation remain concerns, Shopify's strong fundamentals and growing adoption of AI-powered commerce solutions justify investor optimism. The company's solid growth trajectory makes SHOP an attractive stock for long-term investors despite its recent rally.
Shopify currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).