Why Wall Street Is Suddenly Rushing Back Into Beaten-Down Shopify (SHOP) Stock Habib Ur Rehman July 14, 2026 4 min read SHOP Wall Street is returning to Shopify Inc. (NASDAQ:SHOP). On July 13, Jefferies upgraded the stock from Hold to Buy and raised its target to $160 from $140. Three days earlier, Stifel made the same change and lifted its target to $150 from $110.
Both see opportunity after Shopify's roughly 23% year-to-date decline, but the deeper reversal concerns artificial intelligence: what investors treated as an existential threat is increasingly being viewed as a new distribution channel. Shopify's first-quarter results showed little deterioration. Gross merchandise volume increased 35% to $100.74 billion, revenue rose 34% to $3.17 billion, operating income climbed 88%, and free cash flow reached $476 million at a 15% margin.
Shares nevertheless fell nearly 16% on May 5 after Shopify forecast high-twenties second-quarter revenue growth, mid-twenties gross-profit growth and operating expenses equal to 35% to 36% of revenue. An expensive stock was punished for deceleration and heavier AI spending despite strong underlying performance. That treats Shopify primarily as storefront software.
However, commerce still requires structured product data, inventory, payments, fraud protection, taxes, checkout rules and order management. Shopify is positioning itself beneath the interface, where those functions remain necessary whether a purchase begins on a website, or is built with an AI assistant. Shopify Catalog structures billions of products from millions of merchants for AI discovery.
Its Universal Commerce Protocol, co-developed with Google and backed by a broad group of technology and retail companies, provides a common path from product search to checkout. More significantly, Shopify's free Agentic plan lets businesses using competing platforms place products in its Catalog and transact through Shopify-powered checkout. Shopify can therefore capture payment volume without winning a complete platform migration.
If AI weakens storefronts, it could simultaneously enlarge the market for Shopify's transaction infrastructure. Early evidence is small but supportive. AI-generated traffic to Shopify stores increased eightfold in the first quarter, orders originating from AI searches grew nearly thirteenfold, and weekly active stores using Sidekick more than quadrupled.
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