Shopify shares surged after the e-commerce software company reported better-than-expected second-quarter earnings and issued a stronger-than-anticipated revenue outlook, reassuring investors that artificial intelligence is strengthening its business rather than eroding demand.
The scrip peaked to a high of $153.88 apiece on the Nasdaq, up 24.8% as against the previous day's close. However, it pared some of the gains and was trading 15.9% higher at 12:16 pm EST.
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Revenue climbed 34% year-on-year, highlighting Shopify's ability to attract merchants to its e-commerce platform despite intensifying competition in both online retail software and AI-powered tools.
Another closely watched metric also beat expectations. Gross merchandise volume (GMV), which measures the total value of goods sold through Shopify's platform, rose 32% from a year earlier to $115.57 billion, exceeding analysts' estimate of $111.98 billion.
The quarter reflected broad-based growth across the company's business. Revenue, GMV, gross profit and free cash flow each increased by more than 30%, underscoring healthy demand for Shopify's suite of merchant services.
"This was a monster quarter: more than 30% growth in GMV AND revenue AND gross profit AND free cash flow. "We power every kind of business, and with AI, we're expanding what's possible for all of them," Shopify President Harley Finkelstein said.
Shopify provides businesses with tools to build online storefronts, process payments, manage inventory and operate digital commerce. In recent quarters, the company has also expanded its artificial intelligence capabilities, introducing features designed to improve product listings, customer engagement and day-to-day business operations.
The latest results suggest that those AI investments are helping Shopify attract and retain merchants instead of reducing the need for its platform.
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That has also helped ease investor concerns that advances in AI could enable smaller businesses to create and manage online stores independently.
Shopify expects revenue to grow at a low-thirties per cent rate in the third quarter. The forecast beat Wall Street expectations, adding to confidence that merchant demand is holding up and the company's AI strategy is driving growth rather than disrupting it.
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