Shopify Inc. (SHOP) shares have fallen 25.8% over the past month, significantly underperforming the Zacks Computer and Technology sector, which saw a 10.5% increase, and the Zacks Internet-Services industry, which rose by 15.8%. Amazon’s shares increased 6.4%, while Wix.com and Commerce.com experienced declines of 27.6% and 13.6%, respectively, during the same period.
Despite reporting strong first-quarter revenue and GMV growth, Shopify’s management identified rising costs associated with the increased usage of AI products like Sidekick as a concern. Additionally, year-over-year increases in transaction and loan losses related to credit have heightened investor scrutiny over the company’s expanding financial-services exposure. Shopify Payments processed $67 billion in GMV in the first quarter, marking a 41% year-over-year increase with 67% penetration in terms of its platform monetization strategy.
While Shopify’s long-term prospects remain positive, driven by AI integration and expanding capabilities, the company faces challenges related to AI-related costs, credit sensitivity, and ongoing investment needs. Analysts’ earnings per share estimates for 2026 have slightly increased from $1.77 to $1.80, indicating cautious optimism, yet investors may need to wait for clearer signs of stability before making new investments.
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