Bernstein Backs Shopify (SHOP) Despite Stock Drop, Is It Time to Buy?

Bernstein Backs Shopify (SHOP) Despite Stock Drop, Is It Time to Buy?

Sat, September 12, 2026 at 1:34 AM GMT+3 3 min read

• SHOP +1.73%

On September 11, Bernstein analyst Mark Shmulik initiated coverage of Shopify Inc. (NASDAQ:SHOP), giving the stock an Outperform rating and setting the price target at $160.

The analyst told investors in a research note that Shopify Inc. (NASDAQ:SHOP) is "perfectly positioned to lead the way" in commerce innovation.

Bernstein noted that the company provides merchants with support across the broader commerce process, from acquisition and transactions to order fulfillment. Rather than simply helping businesses operate an online store, the company's platform connects several key parts of commerce, allowing merchants to attract customers, process sales, and manage order fulfillment.

AI is also a key factor behind the firm's bullish stance on Shopify Inc. (NASDAQ:SHOP). According to Bernstein, AI is lowering the barriers to entry for a new generation of builders and entrepreneurs, potentially lifting the number of businesses that need commerce infrastructure. This should create a larger market for the company.

However, Shopify Inc. (NASDAQ:SHOP) continues to face intense competition from other large technology platforms. The company's stock has remained under pressure despite strong recent financial results.

Shopify Inc. (NASDAQ:SHOP) reported solid Q2 results, with GMV, revenue, gross profit, and free cash flow each growing by more than 30%. Despite this performance, the stock had declined 17.04% over the past month as of September 11.

The recent decline has not made the stock inexpensive compared with its sector. Shopify Inc. (NASDAQ:SHOP) is currently trading at a forward P/E ratio of 51, well above the sector's average forward P/E of 22.

Here is What the Numbers Say

Hedge fund interest in Shopify Inc. (NASDAQ:SHOP) decreased in the second quarter. According to Insider Monkey's database, 82 hedge funds held positions in Shopify Inc. (NASDAQ:SHOP) in the second quarter of 2026, down from 88 in the first quarter.

However, short interest remains relatively low. As of August 31, short interest stood at 1.53% of the company's float, showing that not many investors are betting against the stock.

At the same time, analysts remain more positive overall. As of September 11, the consensus analyst rating on Shopify Inc. (NASDAQ:SHOP) was Buy, with a 12-month median price target of $175. This represents a potential upside of 38% from the current share price.

Shopify Inc.'s (NASDAQ:SHOP) solid financial results and exposure to the growing use of AI provide reasons for optimism, but its premium valuation, rising competition, and recent stock decline remain important factors for investors to keep in mind. The company might need to continue to deliver strong growth to justify its premium valuation and close the gap between its current share price and the consensus price target.

While we acknowledge the potential of SHOP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

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