Shopify Shares Surge 11.6% on Bullish AI Note and Short-Covering Rebound

Shopify Inc. (NASDAQ: SHOP) shares jumped 11.6% on Monday, closing at $179.14, in one of the stock’s strongest single-day performances of the year.

The rally came despite a lackluster broader market, with the Nasdaq slipping and the S&P 500 roughly flat, underscoring that the move was largely stock- and sector-specific.

The primary catalyst was a bullish research note from RBC Capital, which introduced a new “total cost of ownership” framework to assess software companies’ vulnerability to AI-driven disruption.

WELCOME BONUS - Free Share Bundle When You Invest £50! Get up to £500 cashback for investing with IG.

Invest in 15,000+ shares and ETFs. Open an account now, invest at least £50, and you’ll get a free share bundle worth between £40 and £200. T&Cs apply.

5.0

Open Account Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Evaluating 14 major software firms — including Salesforce, Microsoft, and Adobe — RBC concluded that Shopify possesses “great defensibility” against AI-native competitors, a finding that directly countered a bearish thesis that had battered the stock the prior week.

That earlier sell-off stemmed from a July 21 downgrade by Rothschild & Co Redburn, which cut Shopify to Neutral, warning that Meta’s push into AI-powered small-business commerce tools posed an “existential threat” to roughly half of Shopify’s U.S. business. Shares had declined sharply in the days that followed before Monday’s sharp rebound.

Monday’s gains were amplified by sector-wide enthusiasm — rival Wix.com also surged more than 10% — alongside a risk-on market backdrop driven by easing geopolitical tensions, falling oil prices, and lower Treasury yields, conditions that typically favor high-multiple growth stocks.

Investors are also positioning ahead of Shopify’s second-quarter earnings report, due before market open on August 5, with consensus estimates near $3.44 billion in revenue. Analysts will be watching payments penetration, margins, and transaction losses closely as key indicators of the company’s underlying health.