Shopify Initiated at Outperform by Bernstein on AI Growth Potential

Bernstein initiated coverage of Shopify (SHOP) with an Outperform rating, setting a price target of $160 that implies more than 26% upside from the stock's recent closing price. The investment firm's positive outlook is rooted in the belief that artificial intelligence represents a significant growth opportunity for the e-commerce giant, not a threat.

Following the announcement, Shopify shares rose 2% in premarket trading Friday, according to the report.

The AI-Enabled Thesis

In a note to clients, Bernstein analyst Mark Shmulik called Shopify an "AI’s optimist," arguing that potential risks from AI-native alternatives and agentic commerce are manageable. The firm believes these technological shifts will ultimately broaden the market Shopify serves.

The analyst dismissed concerns about AI-driven checkout systems as "storms in teacups," citing the strong adoption of Shopify's product catalog by AI chatbots and the lackluster debut of services like ChatGPT Checkout. Shmulik stated that merchants prefer to keep transactions on Shopify's secure payment rails. "Ignore the noise, this is your AI-enabled entry point," the note concluded.

Growth Projections and Market Position

Bernstein's financial model projects robust growth for Shopify through the end of the decade. The firm anticipates:

Ad

• Global Gross Merchandise Value (GMV) growing at a ~24% compound annual rate (CAGR) from 2025 to 2030.
• Revenue growing at a ~25% CAGR over the same period.
• Free Cash Flow (FCF) outpacing both, with a projected CAGR of ~32%.

This forecast is supported by Shopify's existing market strength, including its 14% share of U.S. e-commerce and significant international expansion. According to Bernstein, more than 60% of Shopify's total sales volume now comes from its international, physical retail, and B2B channels.

Valuation and Margin Outlook

The analyst acknowledged recent pressure on Shopify's gross margins, which fell 230 basis points year-over-year in 2025, driven by its payments business. However, Bernstein sees a path to monetizing AI tools, highlighting that the number of storefronts using its Sidekick AI assistant increased fourfold year-over-year in the first quarter of 2026.

Bernstein noted that Shopify currently trades at 9 times its estimated 2027 revenue and 45 times its 2027 FCF. These multiples are below the company's historical range of 10-12 times forward revenue and approximately 70 times FCF, reinforcing the analyst's view of an attractive entry point for investors.