\n
By Deborah Mary Sophia<\/p>\n
Feb 11 (Reuters) – Canada’s Shopify forecast quarterly revenue well above Wall Street expectations on Wednesday, as the e-commerce platform benefits from increased focus on artificial \u200cintelligence, and resilient consumer spending despite tariff woes and rising prices.<\/p>\n
Higher-income households have helped \u200cU.S. consumer demand withstand Trump\u2019s tariffs, rising living costs, and labor-market concerns, allowing retailers to post solid holiday-quarter sales heading \u200binto 2026.<\/p>\n
Shopify saw strength across all merchant sizes and regions in the holiday quarter.<\/p>\n
Still, the company’s investments in international expansion, artificial intelligence tools, and higher marketing expenses dented profits. Its adjusted per-share earnings of 48 cents missed estimates of 51 cents, and the company’s forecast of a drop in free cash \u200cflow margins spooked investors.<\/p>\n
Shares of \u2060the Ontario-based company fell 10%, erasing advances seen in premarket trading. The shares were also hit by poor market sentiment towards software stocks, as new AI tools \u2060have cast doubts on the sector’s long-term prospects.<\/p>\n
“This was an excellent result for Shopify. They are now massive share gainers in online retail and that seems to be speeding up… The only counterweight to this \u200bresult \u200bis more indiscriminate selling of software stocks that has \u200bnothing to do with Shopify,” said D.A. \u200cDavidson analyst Gil Luria.<\/p>\n
The company also announced a new share buyback plan of up to $2 billion.<\/p>\n
‘AI ERA HAS NOW REACHED COMMERCE’<\/p>\n
Shopify’s investments in AI tools to help sellers with business tasks have helped it attract both small-scale entrepreneurs and larger retailers. In the fourth quarter, it signed on several large customers such as General Motors, L’Oreal, and Balenciaga.<\/p>\n
The e-commerce firm has also partnered with OpenAI \u200cto allow consumers to make purchases directly through ChatGPT.<\/p>\n
“The \u200bAI era has now reached commerce, and you’re seeing the \u200bstart of this new normal,” Shopify President \u200bHarley Finkelstein said on a post-earnings call.<\/p>\n
“(We’ve talked about) helping merchants sell \u200ceverywhere and to operate smarter… That is still \u200bour focus in 2026, \u200bbut it is now being supercharged by AI.”<\/p>\n
Orders coming to Shopify stores from AI search queries have risen 15-fold since January 2025, he added.<\/p>\n
Shopify expects revenue to rise at a \u200blow-thirties percentage rate in the \u200cJanuary-March quarter, compared with a consensus estimate of a 25.2% rise, according to data \u200bcompiled by LSEG. It reported a better-than-expected 31% jump in holiday quarter revenue.<\/p>\n
(Reporting by \u200bDeborah Sophia in Bengaluru; Editing by Leroy Leo)<\/p>\n<\/p><\/div>\n
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