J.P. Morgan: Shopify connects AI channels to payments and store building; JPMorgan maintains 200 dollar price target

How is Shopify connecting payments to more AI channels?

Shop Pay is used by more than 400 million consumers and supports transactions through channels including Muse, Claude Duet, Grok Bot and Instinct; merchants can also sell on Google Search and in the Gemini app, and connect their stores to Microsoft Copilot.
Merchants can also pin Shopify to the ChatGPT sidebar to view sales, traffic and conversion rates, and add or search for products. JPMorgan believes these connections expand merchants’ reach across AI channels.

Sidekick has expanded from analysis and recommendations to multistep workflows and technical tasks, including generating and uploading designs and customizing checkout pages. It can also propose storefront improvements and test them through SimGym.
Sidekick has more than 386 thousand conversations with merchants each day; among merchants who have used it for longer, analytics accounts for more than 40% of usage. JPMorgan believes there is further room to expand the storefront co-generation feature.
The Canvas store-building tool has generated approximately 16 thousand themes, and more than 2500 stores have gone live after using it; among merchants using Canvas, 80% go live within a day.

The newly launched unified checkout allows consumers to put products from multiple brands in a single cart and complete checkout with one click. JPMorgan believes this could expand merchant distribution and increase consumers’ purchase frequency and average order value.
Shopify has also revamped its web experience. JPMorgan expects this to improve personalized recommendations and product discovery; the product catalog API can also search for products outside the Shopify platform, such as products indexed from merchants’ own websites.

JPMorgan believes continued product updates will help attract more merchants and transaction volume, and reiterated its overweight rating and 200 dollar price target for December 2027. The valuation is based on its forecast of approximately 10.9 billion dollars in gross profit for 2028, using a gross profit multiple of approximately 23 times.
The bank expects year-over-year revenue growth to slow from 33.9% in 2026 to 27.0% in 2027 and 22.1% in 2028; over the same period, gross margin falls from 46.9% to 45.3%, while adjusted operating margin rises from 18.5% to 19.9%. Margin expansion therefore depends on transaction and revenue growth, as well as continued cost discipline and efficiency improvements.
The report notes that AI platforms could also disrupt the e-commerce industry; if product updates slow, merchant acquisition and solution adoption are constrained, or growth investments consume more resources, both revenue growth and margin improvement could come under pressure.