Shopify Posts Record Revenue but Stock Slides Amid AI Commerce Push
Shopify Inc., the Ottawa-based e-commerce platform, announced its highest quarterly revenue in company history during the fourth quarter of 2025, yet investors responded with skepticism, driving shares down significantly despite the strong performance.
Financial Performance Exceeds Expectations
For the three months ending December 31, 2025, Shopify reported revenue of US$3.67 billion, marking a 31% increase from US$2.81 billion in the same period a year earlier. This figure surpassed analyst expectations of US$3.6 billion, driven by robust growth in core markets like the United States and key international regions such as Europe.
The company's gross merchandise value, representing total sales transacted through its platform, grew by 30% during the quarter. Shopify president Harley Finkelstein described 2025 as "Shopify at full throttle," emphasizing the company's focus on compounding growth while preparing for the new era of AI-driven commerce.
Stock Decline Despite Positive Indicators
Despite the strong financial results, Shopify's stock declined approximately 12.5% by noon on Monday following the earnings announcement. This drop occurred even as the company unveiled a share buyback program of up to US$2 billion, a move typically viewed as a sign of financial strength.
Chief financial officer Jeff Hoffmeister stated, "We are launching this share repurchase program from a position of financial and operating strength, as clearly demonstrated by the results we announced today."
Analyst Perspectives on Growth and AI Integration
Analysts expressed optimism about Shopify's trajectory. John Shao of TD Cowen noted in a research note, "Shopify delivered a strong quarter with beats across the board and first-quarter guidance above consensus. The continued growth acceleration is consistent with our previous view that Shopify will be a net beneficiary of AI instead of getting disrupted."
The company has intensified its focus on artificial intelligence in recent months, integrating AI more deeply into its merchant platform and advancing into agentic AI commerce. Finkelstein highlighted Shopify's unique position, stating, "The AI era has now reached commerce. We have trillions of data points from billions of transactions across millions of merchants. We believe we have a more diverse commerce dataset than anyone else on the internet."
AI Commerce Initiatives and Future Outlook
In January, Shopify partnered with Google LLC to launch the Universal Commerce Protocol, designed to help AI agents complete purchases for shoppers. This initiative has gained endorsement from major retailers including Walmart Inc. and Wayfair LLC. Finkelstein reported that orders from AI searches to Shopify stores have increased 15-fold since January 2025.
Martin Toner of ATB Cormark Capital Markets Corp. commented, "While it is too early to see in the data, we believe Shopify's agentic commerce stack has strong growth potential. We believe agentic AI is a force multiplier and we will see a revenue impact in the second half of 2026."
Looking ahead, Shopify anticipates first-quarter 2026 revenue to continue growing at a "low-30s percentage rate," with gross profit dollars expected to increase at a high-20 percentage rate. The company remains confident in its strategic direction despite the market's immediate reaction to its earnings report.
