Shopify Inc. (NYSE: SHOP) experienced a split trading session as U.S. markets closed for Memorial Day, while Canadian markets remained open. The Nasdaq-listed stock ended Friday at $103.00, a decline of 1.77% from the prior close. In contrast, Toronto-listed shares rose 1.16% to C$144.15, with Canada’s S&P/TSX Composite Index reaching a record high.
The stock’s performance reflects ongoing investor debate over the company’s AI-fueled growth trajectory versus its increasing operating expenses. Despite a 2.71% gain over the past five sessions, Shopify shares have fallen 36.01% year-to-date through Friday’s close, according to MarketScreener.
Shopify’s first-quarter earnings, reported on May 5, showed revenue rising 34% year-over-year, with a free cash flow margin of 15%. However, the company’s second-quarter revenue guidance of high-twenties percentage growth and operating expenses ranging from 35% to 36% of revenue gave some investors pause. D.A. Davidson analyst Gil Luria called it a “very strong quarter” but noted that the expense outlook tempered enthusiasm.
The company is doubling down on artificial intelligence, with President Harley Finkelstein stating that “AI is making entrepreneurship dramatically more accessible.” He highlighted that orders from AI-powered searches have increased nearly 13-fold. Shopify’s “agentic commerce” initiative uses AI to assist shoppers in browsing and purchasing, integrating with platforms like ChatGPT, Microsoft Copilot, and Google AI Mode.
Google’s Universal Commerce Protocol, developed with Shopify, Etsy, Wayfair, and Walmart, signals a move toward shared AI shopping standards. However, risks remain: if AI assistants compile shortlists that exclude Shopify merchants, direct-store traffic could be impacted. Roger Dunn, chief commercial officer at THRAD, warned that “if you’re not on the list, you don’t get to make your case.”
Analyst sentiment remains largely positive, with 51 analysts rating the stock a “buy” and an average price target of $151.11, according to MarketScreener. However, Piper Sandler, UBS, and Oppenheimer each reduced their targets following the earnings report. The next major catalyst is Shopify’s annual general meeting on June 16.
As U.S. trading resumes Tuesday, traders will monitor tech sector momentum, Canadian market trends, and any further analyst revisions driven by the ongoing AI spending debate.
