Shopify (NasdaqGS:SHOP) is back in focus after third parties increased their commitment to its e-commerce ecosystem, highlighted by Dotdigital Group’s acquisition of Alia Software, prompting investors to reassess the stock’s recent pullback.

The latest 6.4% 1 day share price gain to US$129.65 comes after a tougher few months, with a 90 day share price return of a 20.1% decline but a 1 year total shareholder return of 22.1% shows longer term holders have still fared well. This suggests momentum has recently been rebuilding from a weaker start to the year as investors react to ecosystem news, AI product progress and increased attention from third parties and analysts.

If this Shopify news has you thinking more broadly about where software and e-commerce meet AI, it could be a good time to check out 60 profitable AI stocks that aren't just burning cash as another set of ideas.

With Shopify up 22.1% over the past year but still showing a 20.1% 90 day decline, and analysts seeing room above the current US$129.65 price, you have to ask: is there still an opportunity here, or is the market already pricing in Shopify’s future growth?

Most Popular Narrative: 30.5% Undervalued

According to one of the most followed narratives on Shopify, a fair value of $186.64 versus the last close at $129.65 points to a sizeable gap that hinges on how its growth story unfolds from here.

AI Store Builder + Sidekick features are increasing user engagement and reducing onboarding friction.

Sidekick users doubled from Dec 2024 to May 2025: https://techcrunch.com/2025/05/21/shopify-launches-an-ai-powered-store-builder-as-part-of-its-latest-update/

Want to see what kind of revenue runway and profit profile that narrative is baking in? The entire fair value hinges on how those adoption and margin assumptions play out. The details behind that $186.64 figure are where the real story sits.

Result: Fair Value of $186.64 (UNDERVALUED)

However, this hinges on consumers and merchants holding up, with any prolonged hit to confidence or tougher tariffs on US-focused sellers potentially cutting into Shopify’s growth story.

Another View: Pricing The Story With P/E

That user narrative leans heavily on future growth, but the current share price already embeds a rich earnings multiple. Shopify trades on a P/E of 137.4x, versus 34.6x for peers and 21x for the broader US IT group, while our fair ratio sits at 51.6x.

That gap suggests the market is paying a large premium for Shopify’s earnings compared with both peers and the fair ratio the market could move towards. This raises a simple question for you as an investor: do you think future results will justify paying more than double that fair ratio?

Next Steps

Feeling conflicted by the mixed messages in the story so far? Take a closer look at the numbers yourself and act while the data is fresh by starting with 1 key reward and 2 important warning signs.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.