Key Takeaways
- Bank of America reinstated Shopify coverage at Buy with a $150 price target, citing the shift toward agentic commerce and modeling 28.3% revenue growth in 2026 and 24% in 2027
- The core logic is a layer argument: as product discovery moves to AI agents, value accrues to transaction infrastructure — checkout, payments, and the product catalog
- The evidence is already in Shopify's numbers, with AI-driven traffic up 8x and AI-search orders up roughly 13x. For e-commerce operators, the report forces a rethink of which layer to compete in
BofA Reinstates Shopify at Buy With a $150 Price Target
Bank of America reinstated coverage of Shopify with a Buy rating and a $150 price objective, arguing the company is positioned to benefit from the shift toward AI-driven agentic commerce.
www.streetinsider.comOn July 7, 2026, Bank of America reinstated coverage of Shopify with a Buy rating and a price objective of $150. Analyst Tal Liani argued the company is "positioned to benefit from the shift toward AI-driven agentic commerce" (StreetInsider). Shopify shares climbed 2.4% in U.S. premarket trading on the news.
The $150 target implies a 22x multiple on 2027 estimated enterprise value to gross profit — a clear premium to the software peer group average of 18.1x. Liani justifies the premium with growth: BofA models Shopify revenue growth of 28.3% in 2026 and 24% in 2027, both above peer averages.
What makes the reinstatement notable is that it is constructed as a direct rebuttal to the market's prevailing view that AI is a threat to Shopify.
The Platform Bypass Fear That Dragged the Stock Down 25%
Shopify shares had fallen 25% year to date. Behind the decline sits a concern known as platform bypass: if the entry point for shopping moves from Google search and social media to AI-native interfaces like ChatGPT, both discovery and transactions could complete inside those interfaces, cutting commerce platforms like Shopify out of the loop.
The worry is not new. Shopify's leadership pushed back explicitly as early as February 2026, stating that AI shopping "will not bypass" its checkout (Retail Brew) — the argument being that even as LLMs reshape product discovery and cart building, the execution of the transaction, payments and order processing, still runs on Shopify's infrastructure.
Selling pressure persisted anyway, largely because the market lacked a quantitative framework for evaluating that claim. BofA now frames the drawdown as "an attractive entry point," recasting the bypass discount as an investment opportunity.
Even If Discovery Moves, Value Accrues to the Transaction Layer
The heart of the report is captured in a single passage.
As discovery shifts to agentic interfaces, value accrues to the transaction and infrastructure layers, where Shopify is deeply embeddedSource: Tal Liani (Bank of America)
Break agentic commerce into its structural layers and you get three: discovery, where products are found; decision, where they are compared and selected; and transaction, where orders and payments execute. What ChatGPT and Gemini displace is primarily the discovery and decision layers. Yet for an AI agent to actually complete a purchase, it needs accurate product data, real-time inventory and pricing, and infrastructure that can process payments safely. BofA points specifically to Shopify's checkout, payments, and product catalog, calling them increasingly central to AI-native transactions.
On market size, Gartner predicts that by 2030 roughly 20% of global digital commerce transactions will be executed through AI platforms. BofA cites the same figure, treating agentic commerce not as a passing theme but as a structural change in the market.
Shopify's own results back the thesis. As of Q1 2026, AI-driven traffic to Shopify merchants rose 8x year over year, while orders from AI-powered searches climbed roughly 13x. Weekly active users of Sidekick, the company's AI assistant for merchants, grew 385% year over year, showing that adoption is compounding on the seller side as well. We covered the details in our Shopify Q1 2026 earnings article, and the crucial fact is that AI-originated orders flow over the existing checkout and take-rate model. Discovery may relocate, but the transaction still rides Shopify's rails. The counter-evidence to the bypass thesis is stacking up quarter by quarter.
Growth Drivers Beyond AI, and the Financial Model
The bull case does not rest on AI alone. On international expansion, ex-U.S. GMV grew 45% year over year in Q1 2026, while Shop Pay volume outside the U.S. rose more than 70%. Shopify Plus, the enterprise offering, grew monthly recurring revenue 20% year over year, outpacing overall MRR growth of 16.5%. Larger merchants churn less and attach more services such as payments and cross-border selling, making the segment a meaningful contributor to revenue quality as well.
| Metric | Current / 2025 | BofA Forecast |
|---|---|---|
| Revenue growth | — | 28.3% in 2026, 24% in 2027 (above peer averages) |
| Operating margin | 17.1% (2025) | 20.5% (2028) |
| FCF margin | 17.4% (2025) | 20.3% (2028) |
| Valuation | Software peer average of 18.1x EV/gross profit | 22x (2027E), supporting the $150 objective |
On profitability, BofA models operating margin expanding from 17.1% in 2025 to 20.5% in 2028, and free cash flow margin rising from 17.4% to 20.3% over the same period. Gross margins are expected to decline modestly given the payments-heavy business mix, but the operating leverage more than offsets it — that is the construction of the model.
What It Means for E-commerce Operators: Choosing Your Layer
Read through an operator's lens rather than an investor's, the upgrade reframes the question from share price to which layer your business stands on.
Strategies that depend solely on traffic to your own site at the discovery layer are becoming structurally disadvantaged. In a world where AI agents are the front door to shopping, the preconditions are that your product data is legible to agents and that you are connected to rails that can execute transactions. Shopify merchants captured the 13x tailwind in AI-originated orders not through individual effort, but because the platform had already structured its catalog and wired up the protocols ahead of time.
There is a second lesson in what earned the premium valuation: not breadth of AI touchpoints, but depth of embedding in transaction infrastructure. Surface-level moves such as deploying a chatbot or optimizing for AI search matter less than the unglamorous layers of checkout, payments, and product data — that, more than anything, is how the BofA report should be read.
Closing Thoughts
Bank of America's reinstatement of Shopify at Buy is more than a single-stock rating headline — it is one of Wall Street's clearest answers so far to the question of where value accumulates in agentic commerce. The more discovery shifts to AI, the more value concentrates in the transaction and infrastructure layers. Gartner's 2030 forecast and Shopify's operating results are lining up as supporting evidence. The platform bypass debate is quietly turning into a different question: not who gets bypassed, but who becomes the road the bypass runs on.
