M Mohan
Private Equity at IncVangal, Former Microsoft Ventures Director
Shopify's 34% growth and 15% FCF margin give it an elite Rule of 40 score of 49, so the market will forgive its GAAP loss. That loss came from a $1.1B write-down on its stakes in Affirm, Global-e and Klaviyo, market volatility rather than business failure. Merchant Solutions grew 39% versus 21% for subscriptions, showing Shopify is really a fintech company, and Bloomberg flows show smart money buying the dip at $108. x.com x.com x.com x.com
Shopify's growth is slowing and its gross margins are shrinking because it is now a payments company, not SaaS. Merchant Solutions (payments, capital, shipping) is roughly 75% of revenue versus 25% for high-margin subscriptions, and payments carry inherently lower gross margins. Growth is slowing from the 30% range toward 20%. Shopify is aggressively replacing support staff and Shopify Capital risk assessment with AI agents; 10-15% layoffs by year-end look likely. x.com x.com x.com x.com x.com
Shopify is becoming the infrastructure layer for modern commerce, not just a store builder. Payments, Shop Pay, lending, analytics and apps deepen its ecosystem, and even if AI makes building stores easier, merchants still need payments, checkout, inventory, customer data and fraud prevention. Revenue rose 34%, GMV 32% to $115.6B, and free cash flow margin hit 18%; growing over 30% while expanding margins at this maturity is impressive. President Harley Finkelstein called it a monster quarter. … Show more
Shopify delivered a strong Q2 and guides to revenue growth in the low thirties for Q3. Q2 revenue rose 34% to $3.58B, beating estimates by about $140M, gross merchandise volume grew 32% to $115.6B, operating income hit $488M and free cash flow was $654M, an 18% margin. Q3 guidance also calls for gross profit growth in the mid-to-high twenties and a free cash flow margin in the high teens to low twenties. x.com
Shopify is an outstanding company with elite management, but it is too expensive because it is evolving into a fintech and gross margins will likely compress over time. Merchant Solutions keeps growing faster than Subscriptions, even as GMV compounds exceptionally and take rates expand. It would be worth owning again at a lower valuation. x.com
Shopify is becoming the infrastructure layer between merchants and AI agents, making AI a source of new demand rather than only a threat. In Q2, AI-driven traffic and orders tripled, and new-buyer orders from AI channels came at nearly twice other channels' rate. Its Catalog gives agents over 1 billion products with 2x higher conversion, and MRR growth reached 19%. A 79x forward P/E premium is justified by accelerating growth, strong retention and improving profitability, if execution holds. … Show more
Shopify, Meta Platforms, Netflix and Salesforce are high-quality large caps now available at opportunity prices, despite the claim that such chances never come. x.com
Shopify the stock, not the company, is the problem: at about 10x sales and 60x forward earnings, expectations are so stretched that small disappointments could bring large multiple compression. The business is exceptional, with revenue up 34%, a beat, and a growth outlook raised to the low 30s from the high 20s. But the higher-quality subscription business grows much slower than merchant solutions, which carry different economics. Upside needs acceleration; downside needs only normalization. … Show more
Shopify is one of the clearest application-software examples of AI materially accelerating growth. Sell-side channel checks point to strong ongoing momentum and AI product attach rates, while Tobi keeps pushing to be first with new products and integrations. The shares are near their pandemic-bubble peak, yet still look discounted to this opportunity; the multiple is lofty, but nowhere near its 2021 level. x.com x.com x.com
Adyen's slowing growth and hard-to-estimate return on its billing investment make the stock increasingly difficult to underwrite. Management reduced its 2026 revenue-growth outlook twice; the margin cut reflects plans to hire about 1,000 people for billing, but the return on that upfront investment is difficult to estimate. x.com
Shopify's moat may not last if AI can build and run a store end to end without a platform taking 3% of GMV. CEO Tobi Lütke says over 50% of its code is now AI-generated; if that reaches 80% and then 95%, merchants and new AI-native startups can use the same models directly. The $101B GMV, 34% revenue growth and 15% FCF margin are real, so the 16% drop after a beat prices the moat's duration, not the quarter. The bypass need not be sudden, only a growing share of new commerce spend. x.com
Amazon blocking Meta's Muse agent from its e-commerce site leaves Meta and Shopify more aligned than ever in agentic commerce, which is bullish for Shopify though the stock has not moved. Amazon's move resembles Salesforce trying to charge for data egress as its AI strategy. Agentic shopping should get people spending more freely and often by removing friction such as combing through bad reviews. x.com x.com
