Shopify's stock soars ahead of earnings. Why this analyst is newly upbeat.

By Hannah Pedone

A MoffettNathanson analyst thinks AI could be a benefit to Shopify's business, rather than a hinderance

Shopify reports earnings on Wednesday morning.

Shopify's stock got hit last week on broader fears about the threat of "vibe-coded" software, but now it's in the midst of a comeback.

Shares of the e-commerce company (SHOP) rose 7.5% on Tuesday after rising 5.4% in Monday's action. The company is due to report holiday-quarter earnings before Wednesday's opening bell.

Michael Morton, an analyst at MoffettNathanson, has become newly bullish on the stock's prospects, writing in a Monday afternoon note to clients that he thinks Shopify will win the "AI commerce wars."

He believes that there's "effectively nonexistent" risk that merchants start vibe coding their own software and upend Shopify's business model. That would be a high-risk, low-reward endeavor for retailers, in Morton's view.

The analyst just upgraded Shopify's stock to buy from neutral, and increased his price target to $150 from $122.

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Morton said that while upgrading a stock right before earnings is usually "ill-advised" - as such a move would signal a short-term call on a stock - this time he's made an exception.

He believes that the company's use of artificial-intelligence chatbots to power product discovery, or "conversational commerce," has made Shopify uniquely positioned to benefit in the AI era.

Shopify's stock is still down 22% so far this year, which Morton sees as a sign that "the market has thrown out the baby with the bathwater."

Morton said that Shopify's new integrations with Google (GOOGL) (GOOG) and OpenAI, which enable users to make purchases directly through conversations with AI chatbots, will open new channels and attract new users.

According to MoffettNathanson's analysis, AI chatbots have been a bigger source of traffic growth for Shopify than for major marketplaces like Amazon (AMZN) and eBay (EBAY) in the past six months.

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Morton said Shopify's potential to benefit from conversational commerce is genuinely new and represents a "once-in-a-generation shift" for Shopify's merchant base.

"Three years ago, migrating to Shopify was a career risk decision for large enterprises," he said. "Today, not migrating to Shopify is a career risk decision."

-Hannah Pedone

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02-10-26 1910ET