Shopify shares climbed nearly 30% this past week after the e-commerce platform posted second-quarter revenue, profit and free cash flow that all accelerated sharply. Management also said agentic AI is already sending a fast-growing stream of buyers to merchant stores, easing investor worries that AI would erode Shopify's business.
Shares of Shopify climbed nearly 30% this past week after the company issued an upbeat growth forecast. Fears that artificial intelligence could weaken Shopify's competitive moat had weighed on the stock, but the company's strong second-quarter report helped ease those concerns.
Shopify's revenue surged 34% year over year to $3.6 billion, driven by a 32% jump in gross merchandise volume to $115.6 billion, the total dollar value of goods sold on its platform. Profitability improved alongside the top line: operating income soared 68% to $488 million, while free cash flow increased 55% to $654 million.
Looking ahead, Shopify sees revenue rising by more than 30% year over year in the third quarter. But it was management's comments on agentic AI-driven commerce that drew the most investor attention on the earnings call. Shopify president Harley Finkelstein said traffic from AI agents to merchants' websites was largely incremental to search-based traffic and growing rapidly.
Finkelstein said "AI-driven traffic and also orders to Shopify stores tripled year over year". He also noted that 75% of AI-attributed purchases occurred outside its top 100 categories, which he said helps boost sales for smaller, more specialized merchants on the platform.
Source: The Motley Fool
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