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The bear case on Shopify (NASDAQ: SHOP) over the past year has been simple. If artificial intelligence (AI) agents start doing the shopping, they could come between merchants and their customers, cutting the e-commerce platform behind those merchants’ storefronts out of the transaction. Coming into this week’s report, shares sat about 32% below their 52-week high.
Then the company reported its second quarter on Wednesday. AI-referred traffic to merchants’ storefronts tripled year over year. Orders that began with an AI search tripled, too. And new buyers arriving through AI channels placed orders at nearly twice the rate of other channels.
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In short, the technology that was supposed to cut Shopify out is, so far, sending it customers. The market noticed, and shares jumped about 17% on the report, to about $144 as of this writing.
So, was the AI-casualty thesis simply wrong?
What the quarter showed
The AI figures came on top of a quarter that was strong in the ordinary ways. Revenue rose 34% year over year to $3.6 billion, matching the first quarter’s pace. Gross merchandise volume (GMV), the total value of goods sold across Shopify’s platform, reached $115.6 billion, up 32% year over year and up from $100.7 billion just one quarter earlier. Operating income climbed 68% to $488 million. And free cash flow was $654 million, with the margin expanding to 18% from 15% in the first quarter.
“This was a monster quarter,” president Harley Finkelstein said in the earnings release.
The AI detail is what makes this report different, though. Half of AI-referred sessions land directly on a product page (2.5 times the rate of traditional search, the company said), meaning these shoppers arrive closer to a purchase. What’s more, 75% of AI-attributed purchases came from outside the top 100 product categories, a sign the traffic is reaching niche merchants, not just the biggest brands.
The new-buyer figure matters most to me. Merchants pay Shopify to help them find customers. And a channel that delivers first-time buyers at nearly twice the usual rate gives merchants one more reason to stay.
Shopify is also building for the agents directly. AI search powered by the company’s product catalog converts at twice the rate of AI search built on scraped data, according to the company. And Sidekick, Shopify’s AI assistant for merchants, saw daily active merchants grow 3.6 times year over year.
