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.
Milles Studio/Shutterstock.com
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.
Read More: 15 AI Stocks That Are Quietly Making Investors Rich Read More: Undervalued AI Stock Poised For Massive Gains: 10000% Upside Potential
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.
