Shopify Inc. (SHOP): A Bull Case Theory

We came across a bullish thesis on Shopify Inc. (SHOP) on Investing Intel’s Substack. In this article, we will summarize the bulls’ thesis on SHOP. Shopify Inc. (SHOP)'s share was trading at $101.51 as of 23^rd May. SHOP’s trailing and forward P/E were 82.53 and 72.46 respectively according to Yahoo Finance.

Shopify’s Q1 results revealed a mixed picture that initially spooked investors despite underlying business strength. The company delivered solid revenue growth and improved adjusted operating income, reinforcing the resilience of its core e-commerce and merchant solutions platform. However, a surprise net loss—largely driven by investment write-downs—overshadowed these positives and contributed to a negative market reaction.

Gross merchandise volume (GMV), a key metric of transactional activity across Shopify’s ecosystem, came in below expectations, signaling possible softness in consumer spending or merchant performance, and raising investor concerns about growth sustainability. Despite the GMV miss, Shopify’s traction with larger merchants continues to grow, and its steady rollout of new tools and functionalities enhances platform stickiness and monetization potential. While some uncertainty persists around valuation and long-term margin expansion, especially following the earnings miss, Shopify’s operating improvements and ongoing innovation present a solid long-term narrative.

The quarter highlighted a company in transition—strengthening its fundamentals and broadening its merchant base while managing through short-term volatility tied to external investments and macro conditions. For investors focused on fundamentals and product-led growth, Shopify still offers a compelling story, albeit with near-term valuation risks that must be balanced against long-term upside.

Previously, we have covered Shopify Inc. (SHOP) in April 2025 wherein we summarized a bullish thesis by Compounding Your Wealth on Substack. The author highlighted the company’s dominant position in global e-commerce, with a 29% share in the U.S. and a growing international presence, supported by its full-stack platform, sticky merchant base, and strong financials. The article emphasized Shopify’s expanding high-margin revenue streams, particularly from Merchant and Subscription Solutions, and projected strong EPS and revenue growth through 2027, justifying its premium valuation. With robust GMV and GPV growth, increasing adoption of B2B and POS offerings, and a disciplined balance sheet strategy, the thesis framed Shopify as a top-tier long-term compounder with significant upside. Since our last coverage, the stock is up 32% as of 27^th May.

Shopify Inc. (SHOP) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 77 hedge fund portfolios held SHOP at the end of the first quarter which was 64 in the previous quarter. While we acknowledge the risk and potential of SHOP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SHOP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.