A trade war seldom does much good to small business, especially small businesses that depend on unrestrained trade. Thus, many Canadian small businesses are finding the counter-tariffs leveled against the United States are hitting them where they live. Despite this, small business facilitator extraordinaire Shopify (TSE:SHOP) is gaining ground, with shares up fractionally in Monday morning’s trading.
The news is hitting Canadian small businesses, like the kind Shopify helps make happen all across the board, like a bus covered in barbed wire dropped from the side of a building. One store, Lax Shack—which specializes in lacrosse equipment—got hit with a 25% tariffs on nearly all of its merchandise. Meanwhile, growing fried chicken chain Cluck Clucks is also likely to take a hit from tariffs. Cluck Clucks needs, per store, between six and eight deep fryers, and those—made with steel and shipped from the United States—will likely jump in price as well.
Despite this, many Canadian small businesses are actually in support of the tariffs. The Canadian Federation of Independent Businesses (CFIB) found that around 75% of respondents in a recent survey may be terrified of the implications of counter-tariffs, but believe they need to be done to fend off what they perceive as United States overreach.
Improving the Offering
Further, not surprisingly, Shopify is working to keep its customers going through any conditions, tariffs or otherwise. Shopify recently purchased Vantage Discovery, which offers tools to improve searches with artificial intelligence (AI). This is actually part of a larger measure that featured Shopify buying several small businesses to build its AI chops.
Vantage Discovery’s product line turns to large language models (LLMs) to improve search results and allow for more relevant results to be displayed when searching. Shopify, in turn, believes it will “…play a key role in supercharging our work for both merchants and buyers.” That should also go toward improving Shopify users’ experience, and maybe letting those businesses better fend off the impacts of tariffs.
Is Shopify Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Shopify stock based on 21 Buys and 13 Holds assigned in the past three months, as indicated by the graphic below. After a 30.71% rally in its share price over the past year, the average SHOP price target of C$190.46 per share implies 38.19% upside potential.
See more TSE:SHOP analyst ratings
Questions or Comments about the article? Write to editor@tipranks.com