Shopify Forecasts Strong Revenue Growth as AI Push Boosts Sales, Shares Slide 10%
Canada’s Shopify projected first-quarter revenue growth well above Wall Street expectations, signaling continued momentum driven by artificial intelligence investments and resilient consumer spending. The Ontario-based e-commerce platform said it expects revenue to rise at a low-thirties percentage rate in the January–March quarter, surpassing analysts’ estimates of a 25.2% increase. The company also reported a stronger-than-expected 31% surge in holiday-quarter revenue, benefiting from steady demand among higher-income households despite tariff pressures, rising living costs, and labor-market concerns.
Shopify saw strength across merchants of all sizes and regions during the holiday season, signing major clients including General Motors, L’Oreal, and Balenciaga. The company’s growing focus on AI-powered tools has helped sellers manage operations more efficiently and expand across platforms. Shopify also partnered with OpenAI to enable purchases directly through ChatGPT, with President Harley Finkelstein noting that orders from AI search queries have jumped 15-fold since January 2025. He described the shift as the beginning of a “new normal” in commerce, with AI set to further accelerate growth in 2026.
However, increased spending on international expansion, AI tools, and marketing weighed on profitability. Adjusted earnings per share came in at 48 cents, missing estimates of 51 cents, while a forecasted decline in free cash flow margins unsettled investors. Shares fell 10%, reversing premarket gains amid broader weakness in software stocks. Despite the pullback, analysts highlighted Shopify’s expanding market share in online retail, and the company announced a new $2 billion share buyback plan, underscoring confidence in its long-term strategy.
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