AI Push Drives SHOP's Merchant Solutions Revenues: More Upside Ahead?

Shopify’s SHOP Merchant Solutions revenues are benefiting from the company’s AI push. Shopify hosts a data trove thanks to an expanding merchant base and a growing number of transactions. This huge amount of data is helping Shopify offer better shopping experiences to merchants and eventually their customers. The company is leveraging agentic commerce to boost shopper experience, beginning with product discovery to conversation and finally checkout through tools like Catalog (product discovery), Universal Cart and Checkout Kit.Shopify’s Merchant Solutions segment revenues jumped 38.2% year over year in the third quarter of 2025 to $2.15 billion. Rising sales among existing merchants and new additions resulted in a 32% increase in Gross Merchandise Volume (GMV), which reached $92.01 billion. Merchants with annual GMV below $25 million generated a significant majority of Shopify’s GMV, while merchants with GMV greater than $25 million grew at a faster pace in the reported quarter.New merchant-friendly tools like Shop Minis, Shop Cash, Sign in with Shop and Shop Pay solutions are helping Shopify win merchants rapidly. Shopify expects mid-to-high 20% revenue growth for the fourth quarter of 2025, led by sustained strength in Merchant Solutions. International growth, especially in Europe and emerging markets, is a key catalyst. Shopify’s expanding partner base is noteworthy in this regard. The company’s partnership with Perplexity is helping it gain a footprint in conversational shopping, while partners like OpenAI (ChatGPT) and Microsoft (CoPilot) are helping to smooth out in-chat shopping flows.The Zacks Consensus Estimate for fourth-quarter 2025 Merchant solutions revenues is pegged at $2.80 billion, indicating 30.6% growth from the figure reported in the year-ago quarter. The consensus mark for fourth-quarter 2025 revenues is currently pegged at $3.58 billion, suggesting 27.3% growth from the figure reported in the year-ago quarter.Tough Competition Hurts SHOP’s ProspectsShopify is facing stiff competition in the e-commerce marketplace from the likes of Wix.com WIX and Amazon AMZN.Wix is gaining from momentum in its core business and solid performance from new user cohorts. Wix expects Base44 to reach at least $50 million in annual recurring revenues in 2025. Strong new user cohorts boosted the top line with further strengths entering into the fourth quarter.  Wix continues to focus on strategic investments in AI offerings, Studio, and commerce solutions. WIX Studio, the company’s premium offering for agencies and professionals, currently has over 2 million Studio accounts, with 75% created by new Partners, forming a vibrant community of creative professionals.Amazon dominates the U.S. e-commerce market, driven by its “Buy with Prime" service, which combines its payments and fulfillment services and makes them available at checkout on other websites while promising faster delivery for Prime members. Amazon’s vast customer base, logistics and AI tools make it a formidable competitor worldwide. AI integration across operations is enhancing personalization, logistics and AWS offerings, strengthening competitive positioning.SHOP’s Share Price Performance, Valuation & EstimatesShopify shares have jumped 28.4% in a year, outperforming the broader Zacks Computer and Technology sector’s return of 28.5% but underperforming the Zacks Internet Services industry’s appreciation of 64.7%.SHOP Stock’s Performance Image Source: Zacks Investment Research Shopify stock is overvalued, with a forward 12-month price/sales of 12.66X compared with the broader sector’s 7.32X. SHOP has a Value Score of F.SHOP Valuation Image Source: Zacks Investment Research The Zacks Consensus Estimate for 2026 earnings is pegged at $1.77 per share, unchanged over the past 30 days and suggests 22.2% growth over 2025’s consensus figure of $1.45 per share.  Shopify Inc. Price and Consensus Shopify Inc. price-consensus-chart | Shopify Inc. Quote Shopify currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amazon.com, Inc. (AMZN): Free Stock Analysis Report Wix.com Ltd. (WIX): Free Stock Analysis Report Shopify Inc. (SHOP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks