TLDR
- Shopify stock surged 6.25% to $149.01 after OpenAI enabled direct shopping through ChatGPT
- OpenAI partnership exposes Shopify merchants to 70 million monthly U.S. ChatGPT users
- Oppenheimer maintains Outperform rating with $180 price target
- Stock trades at 82 times earnings near all-time highs
- De minimis tariff loophole closure could impact future growth rates
Shopify shares jumped on Monday following OpenAI’s announcement that U.S. merchants can now sell products directly through ChatGPT conversations. The integration gives sellers access to approximately 70 million monthly active users.
The stock closed at $149.01, up 6.25% for the session. Trading volume reached elevated levels as investors responded to the AI partnership news.
OpenAI Deal Details
OpenAI will charge merchants a small transaction fee on completed purchases. Stripe handles payment processing for all transactions.
Merchants can direct sales through their own online stores. This setup benefits Shopify’s core business model.
Shop Pay may become a payment option within ChatGPT. Oppenheimer analysts noted Shopify could collect partner fees from the arrangement.
The firm maintained its Outperform rating and $180 price target. Analysts view the deal as a way to capture market share as AI-assisted commerce expands.
Strong Revenue Growth Continues
Shopify posted 31% revenue growth last quarter to $2.7 billion. Gross merchandise volume climbed 31% to $87.8 billion for the period ending June 30.
The company operates in 175 countries worldwide. Its platform serves merchants with varying technical abilities.
Year to date, the stock has gained 40%. Shares recently hit a new 52-week high matching levels from 2021.
Since 2017, Shopify stock has climbed over 1,300%. The company’s market cap now stands at $194 billion.
Tariff Changes Present Risks
The U.S. government closed the de minimis loophole on August 29. The policy previously allowed low-priced goods to enter without tariffs.
Many Shopify merchants ship products to U.S. customers from overseas. The tariff change could reduce platform transaction volumes in coming quarters.
The stock trades at a price-to-earnings ratio of 82. That’s more than triple the S&P 500 average of 25.
When growth slowed in 2022, Shopify shares fell 75% from peak levels. Investors who bought at 2021 highs are just now approaching breakeven.
The fourth quarter will provide the clearest picture of tariff impacts. That period includes the full effect plus holiday shopping season activity.
Some analysts suggest waiting for a pullback given the high valuation. The premium pricing leaves little margin for error if growth disappoints.
The ChatGPT integration represents a new distribution channel for Shopify merchants. However, the tariff policy change creates near-term uncertainty for cross-border transactions.
OpenAI’s 70 million U.S. user base offers substantial reach. The partnership could drive product discovery and conversion rates higher for merchants using the platform.
