2025 Could Be A Breakthrough Year For Shopify Stock: Here's Why

Source: Found here

It's been a magnificent year for Shopify ( TSX:SHOP ) stock, now up well over 63% year to date, beating the TSX Index by a wide margin. Despite the latest run-up, shares may still prove cheap relative to its long-term growth trajectory. Undoubtedly, the company stands out as a significant beneficiary as valuable new generative artificial intelligence ( gen AI ) technologies and tools work their way into the ecosystem.

Indeed, Shopify stands out as a firm that can augment customers in a way that allows them to drive revenues and margins simultaneously. Indeed, large language models (LLMs) can do many impressive things, including writing poems or even helping with homework. That said, the real test, I believe, is how LLMs can help firms improve their business fundamentals via automation and optimization.

Indeed, if the AI revolution carries over the next couple of years, the applications had better start generating enormous profits for more firms than just the AI accelerator makers themselves. In other words, there had better be some massive winners from this AI gold rush other than the so-called "pick-and-shovel" plays.

Indeed, much of the cash during the actual gold rush was made via the firms that sold the equipment to gold prospectors. For the AI scene, the big question is how far and wide the benefits will run. There's ample opportunity for e-commerce firms like Shopify to benefit significantly from what some may call the "next phase" of the AI boom.

Recently, shares of Shopify received a pretty big upgrade from an analyst named Anthony Chukumba over at Loop Capital.

He's a big fan of Shopify's ability to use AI to improve the lives of its merchants. Notably, he sees personalized response recommendations as having the potential to jolt growth.

He's right on the money. The AI personalization factor will eventually benefit a broader range of businesses. Shopify seems like one of the ships poised to rise sooner than most others in the sea. In numerous prior pieces, I urged investors not to discount the company's footing in the AI race. Mr. Chukumba's latest upgrade reinforces my already bullish stance on Shopify stock as it looks to enter a big year for AI.