Shopify (SHOP) Price Target Raised at Wells Fargo on AI Potential

Analysts at Wells Fargo (WFC) have raised their price target on the stock of Shopify (SHOP), citing the Canadian e-commerce company's artificial intelligence (AI) potential.Claim 50% Off TipRanks Premium and Invest with Confidence Unlock hedge-fund level data and powerful investing tools designed to help you make smarter, sharper decisions Stay ahead of the market with the latest news and analysis so your portfolio is always positioned for maximum potential Wells Fargo has taken its price target on SHOP stock to $198 from $125 and reiterated a Buy equivalent overweight rating on the shares. The new price target is nearly 20% higher than where Shopify's stock currently trades. In a note to clients, analysts at Wells Fargo wrote that Shopify is an "under-earning asset" that is well-positioned to benefit significantly from evolving artificial intelligence search and discovery technologies, potentially capturing demand-generation economics in an AI-driven marketplace. Shopify's Premium Valuation Wells Fargo notes that SHOP stock currently trades at 123 times future earnings estimates, which is an extremely high valuation. However, the analysts write that they expect Shopify's revenue and operating income to exceed Wall Street's current estimates by more than 20% and 50% respectively by 2028, helping to justify the premium multiple for the stock. Wells Fargo adds that it projects "Agentic commerce" will emerge as an entirely new revenue stream for Shopify, potentially reaching $4 billion by 2028 and driving positive estimate revisions. As AI search engines transform e-commerce discovery, Wells Fargo believes Shopify will serve as "connective tissue" for merchants seeking more direct sales channels. Is SHOP Stock a Buy? The stock of Shopify has a consensus Moderate Buy rating among 29 Wall Street analysts. That rating is based on 17 Buy and 12 Hold recommendations issued in the last three months. The average SHOP price target of $180.52 implies 7.83% upside from current levels.