«The unseen AI story»: which company's stock is Wells Fargo prophesizing a 20% rise?

Wells Fargo has raised its target price on shares of Canadian e-commerce platform Shopify - the investment bank advises buying them and expects them to rise by almost 20% more. A Wells Fargo analyst called the company an «unnoticed AI story» and advised to take a closer look at its shares, as it is actively innovating in the rapidly growing e-commerce industry, increasingly dependent on artificial intelligence. Shopify's stock price soared nearly 7% in trading on June 6.

Wells Fargo analyst Andrew Bauch raised his target price on Shopify shares from $107 to $125 and reiterated an Overweight rating (above market), CNBC reports. Bauch's new target implies a nearly 20% increase in the company's stock price from its closing price on June 5. The analyst believes Shopify is the «unnoticed AI story»: the platform is not perceived by investors as a traditional AI company, but it is its efforts in this area that could be an important growth driver «for years to come,» Bauch believes. He cited three reasons why Shopify could be considered an AI-themed company: its employees actively use AI for internal needs; it offers unique AI solutions for merchants; and it is ramping up collaborations with AI leaders such as OpenAI, Meta and AI search engine Perplexity.

Shopify and Meta have a long-standing partnership, CNBC notes. For example, Shopify merchants can sync their online storefronts with catalogs on Meta's Facebook and Instagram platforms, which expands audience reach and increases sales. Sellers can also use Meta's advertising tools for targeting and analytics. Last year, AI company Perplexity announced it would use Shopify's technology in its AI shopping tool Shop like a Pro. «While some see the AI wave as a threat [to traditional businesses], we see a lot of opportunity in it,» Bauch emphasized. - «We see AI as a key part of Shopify's strategy and believe its businesses are well-prepared to not just not be affected by the AI boom, but to capitalize on it in the right way.

A strong product lineup and strategic AI partnerships will help Shopify gain as much traction in the so-called agentic commerce segment as in the classic U.S. online commerce market, summarizes a Wells Fargo analyst. Agentic commerce is a new model of e-commerce with AI assistants for the customer or business: for example, they can take over the task of inventory management, give personalized recommendations, process payments and so on. The analyst estimates that the agent commerce market could reach $50 billion in gross merchandise value (GMV) by 2030, with annual growth of 30%. This, he says, is reminiscent of the early stages of e-commerce itself.

Shopify shares jumped nearly 7% to $112 in trading on June 6. That became their highest price in three weeks. With Friday's increase, the company's market value has now entered plus 4% since the start of 2025. By comparison, the main U.S. stock index, the S&P 500, added about 2% over the same period.

In early May, the company's securities sagged after a mixed report for the first quarter and a weak outlook for the current quarter, CNBC notes. Still, they have added about 17% over the past month after the inclusion of Shopify in the Nasdaq 100 Index, which covers the 100 largest non-financial companies. 

Wall Street's latest recommendation on Shopify's stock isreducing their target price from an analyst at UBS from $125 to $110. He also reiterated a neutral rating for the company's stock.

The vast majority of analysts - 36 out of 54 - advise investors to buy the company's shares (Buy and Overweight ratings). Another 17 take a neutral stance with a Hold rating and only one recommends selling (Underweight). Wall Street's consensus target price for Shopify stock is $113.6 apiece, up 8% from the closing price on June 5.