Shopify stock rocketed 17% after crushing second-quarter earnings. Revenue hit $3.58 billion, beating estimates by $140 million and growing 34% year over year. The company also lifted guidance for the current quarter, signaling confidence heading into the second half.
The real story here is what didn't happen. For months Wall Street analysts warned that AI tools would let small merchants build their own commerce platforms without Shopify. They called it "vibe coding." Jim Cramer called that logic backwards. Most Shopify customers are small and medium-sized businesses that lack the resources to build or maintain software in-house, no matter how slick the AI gets. "I'm so angry at people who basically said Shopify's going to be eaten by vibe code, as if small, medium-sized businesses could somehow obviate you when you do so much more than just fulfillment," Cramer said on Mad Money.
Shopify president Harley Finkelstein reframed the entire debate. AI isn't destroying his customer base, he told Cramer. It's creating one. More entrepreneurs are launching businesses, which means more potential Shopify merchants. The company has spent years being underestimated before and after its IPO, and Finkelstein seems unbothered by the pattern. "Shopify has been famously underestimated well before the IPO, and I don't mind that. I like proving them wrong," he said.
Not every analyst bought the reversal. Rothschild and Co's Redburn unit downgraded Shopify to neutral in July, warning that Meta's push into AI tools for small businesses could chip away at Shopify's competitive edge. Some investors are also growing skittish on AI valuations broadly, with Michael Burry recently flagging crash risk despite record highs on major indexes.
For now the numbers are on Shopify's side. A 34% revenue jump with raised guidance beats the bear case on pure merit.
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