Shopify (SHOP) investors have been on a rollercoaster ride.

Last October the stock surged to new all-time highs.

Six months later it got cut in half.

The reason? Artificial intelligence (AI).

Investors feared AI would make it far easier for anyone to build an online store from scratch, weakening the need for platforms like Shopify.

But at the very same time as investors were selling Shopify because of AI… traffic arriving at Shopify stores from AI tripled.

The very thing investors were selling Shopify over was making its business stronger.

Its stock bounced in the last few weeks and I think it could blast through all-time highs by year end.

Shopify is one of the clearest examples of a software company flipping from AI loser to AI winner.

• Ten years ago…

Launching a small online business was a nightmare.

You needed to pay someone to build the website… design the graphics… write the product pages… run ads… answer customer emails… and a bookkeeper to keep the numbers.

That was a lot of hands on deck before the first dollar came through the door. For many would-be founders the hurdle was simply too high.

AI is knocking down these hurdles. With the help of ChatGPT or Claude one person can now sketch a logo… build a basic site… write 10 product descriptions… create ad variations… and handle routine customer questions.

A business that once needed several employees and tens of thousands of dollars to test an idea can now start with one person, a laptop, and a few subscriptions.

We can already see the entrepreneurial appetite in the numbers.

Before 2020 Americans filed around 3.5 million new business applications a year. That jumped above 5 million during the pandemic. And many people assumed it would fade once life returned to normal.

Instead, 2025 set a record at 5.67 million applications. In June 2026 alone, Americans filed more than 531,000 applications to start businesses.

• AI will pour fuel on that fire.

And that’s great for Shopify.

Most folks think Shopify is just a tool for building online stores. That’s a small part of the business. Subscriptions make up about 1/5^th of total revenue.

Shopify makes its real money after the store is built.

Roughly 80% of its business is payment processing, currency conversion, fraud protection, tax tools, and other services stores need once customers start buying.

AI can make it easier to build the front end of a store. But once customers start buying, businesses still need all that infrastructure behind the scenes.

The beauty of this business is Shopify takes a small cut sales flowing through its platform. Shopify Payments typically charges around 2.5%–2.9% plus 30 cents for an online card payment.

Compare that to software priced per employee. Workday's (WDAY) revenue is tied to how many people its customers employ. Shopify doesn't care whether a store has four hundred employees or none. It gets paid on what sells.

More entrepreneurs mean more Shopify stores. And as those stores grow, they process more payments and use more of Shopify’s services.

That gives Shopify a much bigger opportunity than selling store-building software that AI can easily replicate. Perfect for the future we’re heading to.

• I’m max long entrepreneurship.

For much of the 20th century the standard career path was built around long-term employment. You joined a company. Worked your way up. Collected a salary for decades. And hoped there was a pension or a gold watch waiting at the end.

My grandfather worked ninety-hour weeks for forty years behind someone else's bar in Dublin. When he retired, they handed him a gold watch.

That deal is gone, and it isn't coming back. Most people assume what replaces it is unemployment. I think what replaces it is ownership.

The internet gave entrepreneurs instant access to customers. Shopify made it easy to start selling to them. And now AI is cutting costs even further by giving one person access to skills that once required an entire team.

The result could be a historic boom in small businesses. AI will motivate people to create more businesses, try more ideas, and take more swings.

If millions more people are going to become entrepreneurs, somebody will sell them the tools to run their businesses.

We’ve been talking a lot about AI disrupting software businesses. Some products will face brutal competition as AI makes their core features cheap and abundant. But others will benefit as AI expands the market around them.

Shopify belongs in the second camp.

• One caveat: this is not a cheap stock.

It trades north of 100 times forward earnings. A great business at a rich price can still lose you money.

Longtime readers are familiar with our Disruption Investor Venn diagram. The best opportunities sit where great businesses overlap with disruptive megatrends.

Shopify checks both boxes. It's still not in our Disruptor 20, because we hold 20 companies we think are positioned even better. That's the bar.  

To access our full Disruptor 20 portfolio, and our Q4 Disruptor Playbook, where we share our top stocks to finish the year strong, click here. You’ll see the details on our special Labor Day sale, and everything else that comes with a Disruption Investor membership.

Stephen McBride

Chief Analyst, RiskHedge