By Emily Dattilo
Shopify is winning with artificial intelligence, one Wall Street team argued on Friday.
Loop Capital analyst Anthony Chukumba upgraded shares of the e-commerce platform to Buy from Hold and increased his target for the price to $140 from $110.
Shopify stock gained 3% to $117.46 in premarket trading. Through Thursday's close, shares have soared 46% this year.
The analyst believes investors aren't fully appreciating how Shopify is using AI to better serve its merchants through a slate of offerings from personalized response recommendations to instantly generated emails. The company is also using the technology internally in customer support, sales, and human resources, among other areas.
"Thus, we believe Shopify will be able to grow its revenue at a much faster rate than its operating expenses for the foreseeable future, which will result in operating and free cash flow margin expansion and a higher valuation," he wrote.
Write to Emily Dattilo at emily.dattilo@dowjones.com
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(END) Dow Jones Newswires
December 06, 2024 09:16 ET (14:16 GMT)
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