Is SHOP a good stock to buy? We came across a bullish thesis on Shopify Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on SHOP. Shopify Inc.’s share was trading at $126.58 as of March 16th. SHOP’s trailing and forward P/E were 134.66 and 68.03 , respectively according to Yahoo Finance.
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Shopify Inc., a commerce technology company, provides tools to start, scale, market, and run a business of various sizes in Canada and internationally. SHOP demonstrated robust performance in Q3 2025, reinforcing its position as a leading horizontal commerce infrastructure provider with broad-based growth and disciplined profitability. Gross merchandise volume (GMV) reached $92 billion, up 32% year over year, while revenue also grew 32%, driven by strong momentum in merchant solutions, which expanded 38% as Shopify Payments penetration reached 65% of GMV.
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Subscription solutions grew 15%, reflecting pricing and trial headwinds, while gross margin declined to 48.9% due to payments mix and higher AI-related infrastructure costs. Operating income remained healthy at $343 million, or a 12% margin, and free cash flow rose to $507 million, representing an 18% margin, supported by ongoing expense discipline and efficiency gains. Shopify ended the quarter with approximately $6 billion in cash and marketable securities and zero debt, providing ample flexibility for strategic investments.
Growth was geographically and segmentally diverse, with international GMV up 41%, offline GMV up 31%, and B2B GMV nearly doubling, while enterprise adoption accelerated as large brands migrated from legacy platforms. AI-driven traffic and AI-attributed orders have grown sevenfold and elevenfold, respectively, since January, signaling transformative shifts in merchant engagement.
Despite gross margin pressures from payments and AI costs, and elevated payments-related losses at 5% of revenue, Shopify’s scale, innovation, and resilient cash generation underpin a bullish outlook. Q4 guidance anticipates mid- to high-20% revenue growth with free cash flow margins slightly above Q3, suggesting continued strength and long-term expansion potential in global commerce.
Previously, we covered a bullish thesis on Shopify Inc. (SHOP) by Investing Intel in May 2025, which highlighted the company’s solid revenue growth, improving operating income, and expanding traction with larger merchants despite a GMV miss and short-term net loss. SHOP’s stock price has appreciated by approximately 24.69% since our coverage. Sergey shares a similar view but emphasizes Shopify’s Q3 2025 broad-based growth, disciplined profitability, and strong AI-driven adoption trends.
Shopify Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 101 hedge fund portfolios held SHOP at the end of the fourth quarter which was 91 in the previous quarter. While we acknowledge the risk and potential of SHOP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SHOP and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
