Shopify’s Stock Soars, But Can the Company Avoid a Downfall?

Shopify’s stock price has been on a tear, surging by over 5% on Wednesday after Wells Fargo hiked its target price to $125, implying a potential 12% upside from current levels. But beneath the surface, a more nuanced story is unfolding. The bank’s optimism is rooted in its belief that Shopify will ride the AI wave, but this narrative is complicated by a lawsuit from Sezzle, which alleges that Shopify is engaging in antitrust violations and monopolistic practices in its “buy now, pay later” service options.

The lawsuit is a major red flag, and one that investors would be wise to take seriously. Sezzle’s allegations are not trivial, and if proven true could have far-reaching consequences for Shopify’s business model. But despite this, the company remains steadfast in its 2025 guidance, and is downplaying the potential impact of this lawsuit on its operations.

We would argue that this is a classic case of “business as usual” for Shopify, with the company prioritizing its growth trajectory over concerns about antitrust behavior. But this approach is short-sighted, and ignores the very real risks that come with engaging in monopolistic practices. As the market continues to evolve, and the regulatory environment becomes increasingly complex, Shopify would do well to take a more nuanced approach, one that balances its growth ambitions with a commitment to fair and transparent business practices.

Key Takeaways:

  • Shopify’s stock price has surged by over 5% following a target price raise by Wells Fargo
  • The bank believes Shopify will benefit from the AI boom, but this narrative is complicated by a lawsuit from Sezzle
  • The lawsuit alleges antitrust violations and monopolistic practices in Shopify’s “buy now, pay later” service options
  • Shopify remains steadfast in its 2025 guidance, and is downplaying the potential impact of this lawsuit on its operations
  • We argue that this is a classic case of “business as usual” for Shopify, with the company prioritizing its growth trajectory over concerns about antitrust behavior.