While much of the news around e-commerce giant Shopify (TSE:SHOP) (NYSE:SHOP) is focused on its deal with Target (NYSE:TGT), there was other news that should have prompted interest from shareholders. However, shareholders weren’t particularly interested in any of it, as shares slipped fractionally in Monday morning’s trading.
Shopify’s new moves included turning to artificial intelligence (AI) to augment its Sidekick assistant, as well as its image generation tools. Using AI in image generation is a fairly established technology these days, so seeing Shopify put it to work isn’t much of a surprise. With the new image generation systems, Shopify users can turn to their smartphones and enhance images in various ways and put them to use on the site, as well as in promotional materials to use elsewhere.
Further, Sidekick’s augmentations will give users access to market research queries, even going so far as to offer information about customer behavior. Shopify tested that feature on a pool of over 2,000 users, so it’s a pretty safe bet that it’ll work out well.
Part of a Larger Push
Shopify President Harley Finklestein noted that this is part of a larger initiative to invest in marketing following an unpleasant quarterly report that featured the slowest revenue growth in the last two years. The recent move to expand its presence with Target is likely also part of that effort and is about the best chance Shopify can get to bring its numbers back up.
While the overall economic environment won’t do it any favors, assuming that this downturn passes, Shopify will be in a much better position going forward.
Is Shopify a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SHOP stock based on 17 Buys and 14 Holds assigned in the past three months, as indicated by the graphic below. After a 6.82% rally in its share price over the past year, the average SHOP price target of C$105.05 per share implies 18.3% upside potential.
