Shopify Stock (SHOP) Gets a New 'Buy' Rating. Here's Why
Complete. Here is the key summaryJefferies upgraded Shopify (SHOP) to 'Buy' with a $160 price target, citing AI integration as a key growth driver. Analyst Samad Samana believes Shopify is positioned as the primary infrastructure for agentic commerce, likely surpassing earnings estimates. Despite a 22% YTD decline due to AI concerns, Jefferies views AI as a long-term tailwind. The stock holds a consensus Strong Buy rating from 26 analysts.
The stock of Shopify (SHOP) has received a new Buy rating as the Canadian e-commerce company employs more artificial intelligence (AI) features across its platform.
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Wall Street brokerage Jefferies Financial Group (JEF) has placed a Buy rating and $160 price target on SHOP stock. The price target is nearly 30% higher than where Shopify's shares currently trade. Analyst Samad Samana says he's bullish on Shopify for several reasons.
Samana recommends SHOP stock because he sees the company as strongly positioned to become "the primary infrastructure layer for agentic commerce." The analyst states that AI agents increasingly intermediate the retail buyer's transactions, and that Shopify is empowering merchants to capture incremental gross merchandise volume (GMV) with its AI products and services.
SHOP Stock Under Pressure
In a note to clients, Samana adds that Shopify is likely to surpass Wall Street estimates for its upcoming earnings, powered by growing use of the company's AI toolkit. Wall Street consensus is for Shopify to report earnings per share (EPS) of $0.28, representing 12% year-over-year growth.
The bullish note from Jefferies comes ahead of Shopify's next earnings print that's scheduled for Aug. 5. The new Buy rating is no doubt welcome news for the Ottawa-based e-commerce company and its shareholders. SHOP stock has gotten caught up in concerns over the impact of AI on its business. Consequently, Shopify's share price has declined 22% this year.
However, Jefferies says that AI is likely to be a long-term tailwind for Shopify rather than a headwind.
Is SHOP Stock a Buy?
Shopify's stock has a consensus Strong Buy rating among 26 Wall Street analysts. That rating is based on 24 Buy and two Hold recommendations issued in the last three months. The average SHOP price target of $158.29 implies 30% upside from current levels.