The AI-Fueled Entrepreneurship Boom: Why Shopify Is Poised to Thrive
Contributed Opinion
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Artificial IntelligenceTechnologySpecial Situations
Stephen McBride of RiskHedge shares his thoughts about the AI disruption in Shopify Inc. (SHOP:NASDAQ).
Investors in Shopify Inc. (SHOP:NASDAQ) have experienced a wild ride recently.
In October of last year, the stock skyrocketed to record levels.
But just a half year later, it plummeted by 50%.
The culprit? Artificial intelligence, or AI. Shareholders worried that AI would dramatically simplify the process of creating an online store from the ground up, diminishing the demand for e-commerce platforms such as Shopify.
However, at the exact same moment that investors were dumping Shopify shares due to AI concerns, the amount of traffic coming to Shopify stores from AI had actually tripled.
The very technology that spooked investors was, in fact, bolstering Shopify’s operations. Its shares have rebounded recently, and I predict they could soar past previous peaks by the close of the year.
Shopify provides one of the most striking illustrations of a software firm transforming from an AI victim to an AI victor.
A decade ago, establishing even a modest online enterprise was a daunting task. You had to shell out cash for web development, graphic design, copywriting for product descriptions, advertising, customer support, and accounting – all before earning your first penny. For many aspiring entrepreneurs, the obstacles seemed insurmountable.
AI is tearing down these barriers. With tools like ChatGPT or Claude, a single individual can now design a logo, put together a simple website, craft multiple product descriptions, generate ad variations, and field common customer inquiries.
What used to require a team of several and tens of thousands in startup costs can now begin with one person, a computer, and a handful of software subscriptions.
The entrepreneurial drive is already evident in the data. Prior to 2020, Americans submitted around 3.5 million new business applications annually. That figure leaped above 5 million amid the pandemic. Many assumed it would taper off once normalcy resumed.
Instead, 2025 marked a new high with 5.67 million applications. In June 2026 alone, over 531,000 business applications were filed in the U.S.
AI will only accelerate this trend. And that bodes extremely well for Shopify.
Most people view Shopify as merely a tool for creating online shops. But that’s just a small fraction of their business model. Store subscriptions account for only about 20% of total revenue.
Shopify’s real profits come after the store launches. Approximately 80% of its revenues stem from payment processing, currency exchange, fraud detection, tax solutions, and other services that stores require once sales start flowing in.
AI may simplify the process of building a store’s front end. But once transactions begin, businesses still need all that back-end infrastructure.
The beauty of this model is that Shopify takes a small percentage of sales that pass through its platform. Shopify Payments generally charges around “2.5%–2.9% plus 30 cents” per online card transaction.
Contrast that with software priced per user. Workday’s (WDAY:NASDAQ)income is linked to the size of its customers’ staff. Shopify doesn’t care if a store has four hundred employees or zero. It gets paid based on what’s sold.
More entrepreneurs equals more Shopify stores. And as those stores scale up, they process higher volumes of payments and utilize more of Shopify’s services.
This presents Shopify with a far greater opportunity than just selling store-building software that AI can readily duplicate. It’s ideally suited for the future we’re moving towards.
I’m all-in on the rise of entrepreneurship.
For a large part of the previous century, the typical career trajectory revolved around long-term employment. You joined a firm, climbed the ladder, earned a paycheck for decades, and hoped for a pension or fancy watch at the finish line.
My grandfather toiled ninety-hour workweeks for forty years, working at someone else’s pub in Dublin. When he retired, they gave him a gold watch.
That arrangement has vanished, and it’s not returning. Most assume what takes its place is joblessness. I believe what replaces it is ownership.
The internet provided entrepreneurs with immediate access to customers. Shopify made it simple to begin selling to them. And now AI is slashing expenses even more by enabling one person to possess capabilities that previously demanded an entire staff.
The outcome could be an unprecedented surge in small businesses. AI will inspire people to found more companies, test more concepts, and take more chances.
If millions more become entrepreneurs, someone will provide them with the tools to manage their enterprises.
We’ve discussed extensively how AI is upending software companies. Some products will encounter fierce competition as AI renders their core capabilities inexpensive and ubiquitous. But others will gain as AI grows in the market surrounding them.
Shopify falls squarely in the latter category.
One warning: this is not an inexpensive stock.
It trades at over 100 times projected earnings. Even a stellar business at a lofty valuation can still lose you money.
Long-time readers know our Disruption Investor Venn diagram well. The most promising opportunities lie at the intersection of great businesses and disruptive megatrends.
Shopify ticks both of those boxes. It still hasn’t cracked our Disruptor 20, because we own 20 companies we believe are positioned even better. That’s how high we set the bar.
To see our complete Disruptor 20 portfolio and our Q4 Disruptor Playbook, where we reveal our top stocks to end the year strong,click here. You’ll find details on our special Labor Day discount, and everything else included with a Disruption Investor membership.
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- Stephen McBride I, or members of my immediate household or family, own securities of: None. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.
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