Attractive entry point: why do analysts advise buying up declining Shopify stock?

Analysts at Mizuho and TD Cowen believe that artificial intelligence will become a structural growth driver for e-commerce platform Shopify, rather than a risk and destabilization factor, CNBC writes. Both banks have upgraded their assessment of the company's stock, recommending buying it instead of holding it in a portfolio (ratings of "Outperform" and "Buy" instead of "Hold"), Yahoo Finance points out. That's the assessment the analysts gave Shopify after the company released a strong fourth-quarter 2025 report on Feb. 11.

- Mizuho analyst City Panigrahi raised her recommendation on Shopify shares from "neutral" to "buy" (Outperform rating). Her target price of $150 implies a potential upside of 26% relative to Shopify's closing price on Feb. 11. Panigrahi noted in particular the company's "excellent" results in recent quarters and its solid growth momentum in key areas. In addition, the analyst highlighted the company's expanding international presence and agent-based AI solutions (specifically, technology that allows AI agents like ChatGPT or Perplexity to independently purchase items from online stores) as factors that should support the company's strong revenue growth.

"Amid growing concerns that AI could destabilize the software sector, we view Shopify as one of the companies with the best chance of showing outperformance over the next 12 months and see the recent correction (-32% YTD vs. -21% for the iShares Expanded Tech-Software Sector ETF, which tracks the performance of the IGV software sector) as an attractive entry point," Panigrahi noted.

- TD Cowen analyst John Shao also positively assessed the company's strong quarterly report and its continued growth despite seasonal factors, CNBC writes: he upgraded Shopify from "Hold" to "Buy". Shao's target price of $159 for the company's securities remained unchanged - it suggests a potential upside of 34% relative to their closing level on February 11.

Like Panigrahi, Shao sees the correction in Shopify stock as an attractive entry point for investors. He cited Shopify's solid fundamentals as the driver of the stock price growth. In his view, investors expecting rapid monetization of AI may have been disappointed, but the company's strategy will have a stronger effect in the long run. "In our view, Shopify is now expanding its reach in an effort to attract more merchants interested in selling through LLM (Large Language Models)-based channels, and discussing AI monetization at such an early stage of market formation will only undermine the business reputation the company is trying to build," he said, stressing that despite the volatility in the market, Shopify, in his view, will remain protected by its role in the e-commerce infrastructure and partnerships with major language solution providers, writing

Shopify shares were down 8% in trading on February 12. They have lost more than 32% since the beginning of the year.

- Shopify's quarterly revenue in the fourth quarter of 2025 rose 31% year-over-year to $3.67 billion, beating the FactSet consensus forecast of $3.59 billion, CNBC writes.

- Operating profit rose 36% to $631 million from $465 million a year earlier. Free cash flow reached $715 mln, which was also above FactSet's expectations of $685.4 mln, the TV channel reports.

- Total merchandise sold through retailers (GMV) also rose 31% to $123.8 billion, which was higher than the 28% increase analysts had expected, Barron's reports.

- In addition, the company announced a $2 billion share repurchase program, expecting further revenue growth of "about 30%" in the first quarter of 2026.

After the publication of the report on February 11, the company's securities ended the session with a decline of 6.7%, reversing after the morning growth, which reached 10%, Barron's noted. The publication attributed such dynamics to the general decline in shares of technology companies. "The reaction [of the market] is unexpected and does not reflect the strong fundamentals of growth in the quarter," - commented Barron's situation William Blair analyst Arjun Bhatia. - Shopify is a growth stock, and momentum across all metrics remains solid. Probably a more realistic explanation for the decline is investors' continued concerns about AI and its impact on the technology sector," he said.

A total of 51 analysts are monitoring Shopify's stock, according to data compiled by Marketscreener. 34 of them advise to buy shares of the company, 16 recommend to keep them in the portfolio and only one - to sell.

This article was AI-translated and verified by a human editor