ewsba.se
Written by Geoffrey Seiler for The Motley Fool->
Shopify reported a strong Q1 revenue increase, but the shares tumbled nonetheless.
The stock is now trading at an attractive valuation given its growth.
It's been a rough start to the year for Shopify (NASDAQ: SHOP) shareholders. The stock has lost nearly a third of its value in 2026, as of this writing. This comes despite the e-commerce software company continuing to report strong revenue growth.
Let's take a closer look at its recent first-quarter results and prospects to see if this dip is a good buying opportunity.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
For a market that loves revenue growth, Shopify delivered, with first-quarter sales soaring 34% year over year to $3.17 billion, surpassing the $3.08 billion analyst consensus estimate. It was its highest quarterly increase in over four years.
Gross merchandise volume (GMV) on its commerce platform climbed by 35% year over year to $100.74 billion. International markets led the way, with GMV climbing 45%, while European GMV surged 48%, or 35% in constant currencies. Business-to-business GMV skyrocketed 80%, while offline GMV rose 33%, and Shop App GMV soared 70%.
Overall, merchant solution revenue (payment processing fees, Shopify Shipping, and other merchant services) jumped by 39% year over year to $2.42 billion. Subscription revenue grew 21% to $750 million, led by new customer additions and subscription upgrades. Monthly recurring revenue (MRR), which is the value of all its subscription plans at period end, increased by 16% to $205 million.
The company said that $67 billion, or 67%, of its GMV was processed by Shopify Payments in the quarter. This was a 41% increase in GMV processed using the internal service.
Shopify has been leaning into artificial intelligence (AI) and making good progress. Orders from AI-powered searches climbed by a multiple of 13, while AI-driven store traffic was up by a multiple of 8. Management said merchants using its new Sidekick AI assistant surged 385%, while users built 12,000 custom apps with it.
Second-quarter revenue guidance calls for an increase in the high 20% range, with a gross profit rise in the mid-20% range.
Following its latest sell-off, Shopify stock now trades at a valuation where it makes sense to be a buyer of the dip. With a forward price-to-sales ratio of 9.5 based on 2026 analyst estimates and below 8 based on 2027 projections, this is an enticing entry point for a company increasing sales by about 30%.
The company looks well-positioned for the rise of agentic AI in commerce. One of its big advantages is its Shopify catalog, which acts as a structured feed that lets AI agents search through items sold by shops on the platform.
AI agents need trustworthy structured data, and the Shopify catalog provides this because it is the backbone of the universal commerce protocol (UCP) that it co-developed with Alphabet. Meanwhile, Sidekick is seeing strong momentum by helping users drive growth in their own businesses.
As the world moves toward agentic commerce, Shopify is one of the few alternatives to Amazon. That makes it a highly valuable platform and makes the stock a buy.
Before you buy stock in Shopify, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Shopify wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $476,034!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,274,109!*
Now, it’s worth noting Stock Advisor’s total average return is 974% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of May 8, 2026.
Geoffrey Seiler has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Shopify. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
This data feed is not available at this time.