How Enterprise, International Markets Boosted Shopify Stock
Dec 23, 2025 16:40:00 -0500 by REINHARDT KRAUSE
Shopify (SHOP) is the IBD Stock Of The Day as the e-commerce software and services provider expands from its roots in the small and medium-size business markets. Shopify stock has gained 59% in 2025.
On the stock market today, Shopify stock dipped a fraction to close at 169.53. However, Shopify stock has forged a cup base with a buy point of 182.19, according to MarketSurge charts. Aggressive investors could look for an early entry around 169, but Shopify’s chart is messy.
Shopify sets up e-commerce websites and partners with others to handle digital payments and shipping. The December quarter is usually Shopify’s best quarter annually because of the holiday shopping period.
Shopify Stock: Total Addressable Market Expands
Shopify has expanded into the “enterprise” market targeting large companies. Its e-commerce software and services were designed for companies selling products to consumers. But Shopify has expanded into business-to-business (B2B) e-commerce.
What’s more, Shopify’s e-commerce business traditionally has focused on online shoppers. But the company has pushed into “point-of-sale” retail services in physical retail stores, especially for large merchants.
Lastly, some of Shopify’s growth is coming from expansion into Europe.
Shopify has had success moving upmarket with larger sellers and enterprise merchants, UBS analyst Timothy Chiodo said in a recent report.
“Shopify has made meaningful strides (share gains) in the enterprise eCommerce space following the launch of Commerce Components by Shopify (CCS) in early 2023,” Chiodo said.
“Shopify is no longer a North American-focused SMB e-commerce platform,” he said. “Rather, the company is having success across three total addressable market expansive growth pillars in enterprise, international, and in-store point of sale.”
Agentic AI Shopping Opportunity
Founded in 2004, Shopify launched its initial public offering in 2015. In 2023, the company sold its delivery and logistics business to Flexport, easing investor angst over rising capital spending.
Executive turnover has continued at Shopify. Chief Operating Officer Kaz Nejatian recently left along with Chief Revenue Officer Bobby Morrison. Shopify promoted Jess Hertz, formerly general counsel, to chief operating officer.
Meanwhile, many tech companies are focused on autonomous, goal-driven artificial intelligence “agents” that complete tasks on their own. One of the big applications is expected to be online shopping on behalf of consumers.
Shopify has been working with big players in agentic shopping, such as ChatGPT owner OpenAI and Alphabet’s (GOOGL) Google.
Morgan Stanley analyst Keith Weiss says Shopify has a big opportunity.
“We see the high consumer utility in agentic shopping — better product discovery, deeper product availability and pricing-comparison capabilities — removing friction from the buyer experience, in turn increasing conversion, and deepening e-commerce penetration,” Weiss said in a client note. “Structural inflection in e-commerce penetration should further support the durability of Shopify’s gross merchandise volume growth.”
Q3 Financial Results
Using generally accepted accounting principles (GAAP), Shopify’s third-quarter earnings came in at 20 cents a share vs. the consensus estimate of 26 cents amid net unrealized losses on equity and other investments. Also, revenue climbed 32% to $2.844 billion, topping estimates for $2.757 billion.
Meanwhile, operating income rose 53% to $434 million vs. Wall Street’s target of $437 million. Gross margin of 48.9% came in below estimates of 49.3%. Gross merchandise volume from merchant customers rose 32% to $92 billion vs. the consensus estimate of $89.12 billion.
Some Shopify stock analysts have focused on operating margin improvement.
“Shopify should be able to maintain current free cash flow margins despite becoming a cash taxpayer with headcount expected to remain steady (at 8,000),” Oppenheimer analyst Ken Wong said in a report. “AI investments are showing up in gross margins, but management is not signaling deterioration and does not anticipate material pressure over the longer term. Enterprise remains a top priority.”
Shopify Stock: Technical Ratings
The e-commerce stock holds an IBD Composite Rating of 90 out of a best-possible 99, according to IBD Stock Checkup.
IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
However, Shopify stock has a weak Accumulation/Distribution Rating of D+. The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying and E means heavy selling.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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