Shopify projected current-quarter revenue growth above Wall Street estimates on Wednesday, signaling the company's AI efforts were drawing more merchants to its suite of e-commerce services and driving broader consumer demand.
The upbeat forecast coupled with second-quarter revenue that beat estimates pushed U.S.-listed shares of Shopify up more than 15% in premarket trading. The stock had fallen more than 23% so far this year, as of last close.
While geopolitical tensions and gas price spikes resulting from the Iran war have put a strain on shopping budgets, consumers have still shown resilience thanks to a strong labor market and continued wage growth.
Through its partnerships with OpenAI, Google and Microsoft, Shopify has also been able to drive consumer demand by helping retailers on its platform reach more customers through AI chatbots or search queries.
Meanwhile, the company's AI tools - such as its Sidekick AI assistant - have also seen steady adoption from small- and medium-sized businesses that are increasingly leaning on AI to execute tasks faster and cheaper.
Shopify generates revenue by taking a cut of sales from sellers on its platform and by selling subscription plans to merchants.
The company said total revenue rose 34% to $3.58 billion in the second quarter ended June 30, compared with analysts' average estimate of $3.45 billion, according to data compiled by LSEG.
It expects revenue to grow in the low-thirties percentage range in the third quarter, above analysts' estimate for a 26.3% increase.