Shopify’s Stock (NASDAQ: SHOP) Falls on Earnings, But ‘Built For Times Like These’

Shopify stock (NASDAQ: SHOP) has fallen sharply lower in the pre-market, down 8.1%, despite a slight beat on earnings expectations. The company delivered $2.36 billion in revenue on the period, where markets had expected $2.33 billion.

Comments from Shopify President Harley Finkelstein were bullish, seeing the firm as having built the firm ‘for times like these'. It was also the view that “Q1 results confirm two clear facts. First, we are delivering both growth and profitability at scale. Second, businesses perform better on Shopify”.

As far as guidance, in Q2 the company see's high teen growth YoY in the period, with operating expenses in the 39-40% range. Analysts had been looking for a growth number in the 20% range, accounting for some of the bearish sentiment surrounding the print.

Shopify’s voluntary transfer from the NYSE to NASDAQ on March 31, 2025, marked a strategic shift to align with tech-focused indices. The stock surged 7.5% on the announcement date, fueled by expectations of inclusion in the NASDAQ-100 Index. With a market cap exceeding $121 billion, Shopify dwarfs current index components like MongoDB ($20 billion), making it a strong candidate for inclusion during the next rebalance.

Technical analysts note that the transition coincided with a rebound from critical support at $90, with the 200-day SMA ($88.17) acting as a floor.

CEO Mandate for AI-Centric Operations Sparks Efficiency Debate

In an April 2025 memo to employees, CEO Tobi Lutke declared artificial intelligence (AI) a “fundamental expectation” for all roles at Shopify. Teams requesting additional hires must now demonstrate that AI cannot perform the tasks in question, a policy aimed at maximising productivity through automation. Lutke highlighted AI’s role as a “multiplier” for output, citing examples where employees leveraged tools like Shopify Sidekick to tackle previously intractable projects.

This directive aligns with Shopify’s acquisition of AI search firm Vantage Discovery in late 2024, which enhanced its platform’s recommendation and personalisation capabilities. While the move signals operational efficiency, analysts speculate about potential workforce reductions and the long-term impact on innovation.

Shopify’s pre-market volatility encapsulates the tension between its AI-driven growth strategy and macroeconomic uncertainties. The NASDAQ listing enhances visibility among tech investors, while Lutke’s operational mandates aim to solidify margins. However, elevated valuations and MRR risks from subscription model changes warrant caution.