Shopify SHOP is increasingly positioning itself as more than an e-commerce platform. The company is building the infrastructure that could power AI-driven retail, combining its vast commerce data, merchant ecosystem and AI tools to make buying and selling more automated and efficient. Recent results suggest this strategy is gaining traction. Shopify delivered first-quarter 2026 revenue growth of 34% year over year to $3.17 billion while gross merchandise volume (GMV) surpassed $100 billion for the second consecutive quarter, reaching $101 billion.
A key pillar of Shopify’s AI strategy is Sidekick, its AI-powered commerce assistant. Management noted that weekly active shops using Sidekick increased fourfold year over year in the first quarter. Merchants created more than 12,000 custom apps through Sidekick during the quarter, while nearly half of all Shopify Flow automations were built using the tool. These trends suggest that merchants are increasingly relying on Shopify’s AI capabilities to manage and scale their businesses.
Shopify is also becoming an important bridge between merchants and emerging AI shopping channels. The company enables product discovery and purchases through platforms such as ChatGPT, Microsoft Copilot and Google AI services. Management highlighted that AI-driven traffic to Shopify stores grew eightfold year over year in the first quarter, while orders generated through AI-powered searches increased nearly 13 times. Traffic from Shopify’s structured product catalog converted at twice the rate of general AI search traffic, demonstrating the value of its commerce data advantage.
Importantly, Shopify continues to invest aggressively in AI while maintaining strong profitability. The company generated $476 million in free cash flow and a 15% free cash flow margin in the quarter. Management expects revenue growth in the high-20% range for the second quarter while continuing to expand AI capabilities.
With AI increasingly reshaping product discovery, marketing and commerce operations, Shopify appears well-positioned to become a foundational infrastructure provider for the next generation of retail.
How Shopify Compares in the AI Commerce Race
Two companies often mentioned in discussions about AI-enabled commerce infrastructure are Amazon AMZN and Wix.com WIX. Both are investing heavily in AI, but their approaches differ from Shopify’s.
Amazon is leveraging its vast marketplace, logistics network and AI capabilities to improve product discovery, advertising and fulfillment. Amazon has introduced AI-powered shopping assistants and seller tools, making it a major force in AI-driven retail. However, Amazon primarily operates a marketplace model, whereas Shopify focuses on empowering independent merchants to own customer relationships. As AI commerce expands, Amazon remains a formidable competitor because of its scale and consumer reach.
Wix.com is also integrating AI into website creation, store design and business management. Wix.com has launched AI tools that help merchants build online stores and automate workflows with minimal technical expertise. While Wix.com targets many small and medium-sized businesses, Shopify benefits from a deeper commerce ecosystem, stronger payments infrastructure and broader enterprise adoption.
Both Amazon and Wix.com are pushing AI deeper into commerce. Still, Shopify’s combination of commerce data, AI-powered merchant tools, payments, fulfillment and growing integrations with AI shopping channels gives it a differentiated position in the race to become the infrastructure layer for AI retail.
SHOP Stock’s Price Performance & Valuation Trend
Shares of SHOP have trended 30.1% downward year to date (YTD), underperforming the Zacks Internet - Services industry, as shown below.
SHOP’s YTD Price Performance
Image Source: Zacks Investment Research
SHOP stock is currently trading slightly at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 57.16, as evidenced by the chart below.
SHOP’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
EPS Trend of SHOP Stock
Over the past 60 days, expectations for the company’s 2026 earnings per share increased to $1.80. The estimate indicates 53.9% growth from the year-ago level.
Image Source: Zacks Investment Research
Shopify currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).