Shopify Stock Slides 6% in a Day — Is the Canadian Tech Giant Losing Its Shine?

Observing Shopify stock over the past few weeks has given me the impression that investors are still unsure of the narrative they want to pursue. New York shares fell another 4.72% on Thursday, closing close to $125. The corresponding print in Toronto was even worse, down about 6%, with unusually low volume. The tape has been remarkably grumpy for a company that ended 2025 with $11.56 billion in revenue, a 30% growth rate, and a recently approved $2 billion buyback. The stock has lost almost 19% so far this year.

A portion of this is housekeeping prior to earnings. High-multiple software names are nearly always sold into prints when sentiment is uncertain, according to Shopify’s Q1 2026 numbers released on May 5. That will be accomplished with a P/E of 143. It’s the kind of number you can defend when the growth story is clear, but as soon as something seems strange, like a softer margin or a cautious guide, the same multiple appears to be a liability. The long-term commerce platform thesis appears to be supported by investors. When the Fed has other plans, they simply don’t want to be the ones with a 13x-sales stock.

Founded in 2006 out of a snowboard shop that couldn’t find good e-commerce software, the Ottawa-based company has grown to become one of those rare Canadian tech stories that actually made a difference. Shopify is still run by Tobi Lütke, who continues to tweet in a somewhat unfiltered manner and consistently emphasizes that Shopify is a commerce operating system rather than a retail stock. He is correct by the majority of measures. In a different era, the $378.4 billion gross merchandise volume for 2025 would have been sufficient to anchor an entire index.

However, skeptics do have their moments. In Q4, the gross margin fell 190 basis points to 46.1% due to a greater mix of Merchant Solutions, primarily payments, which are substantial but thinner than the subscription business. From the 19% print in Q4, management directed free cash flow margin for Q1 2026 to the low-to-mid teens. For a business this size, that figure is still impressive. However, when the line’s slope shifts even a little, growth-at-scale investors can be harsh. There’s a feeling that the market is just repricing what Shopify’s next chapter truly looks like, which accounts for part of the softness this April.

To its credit, RBC Capital has maintained composure. Citing stronger U.S. e-commerce growth—non-store sales up 13.2% year over year in March—the company reiterated its Outperform rating and $170 price target last week. This type of macro data should, in theory, be a boon for Shopify’s whole merchant base. ATB Cormark went one step further and upgraded the stock to Outperform with a $250 Canadian dollar target. While maintaining an Overweight rating, Wells Fargo reduced its target from $191 to $166. Two purchases, two holds, and an average goal of about $159. You can learn something from the disagreement itself.

It’s difficult to ignore how much of the current discussion revolves around artificial intelligence. Shopify has been releasing tools at a rate that seems almost out of character for a business of its size, including Sidekick, its AI Toolkit, and deeper agentic features within its admin. According to some analysts, the shares are inexpensive and that is the true story. Some, less sympathetically, contend that the stock already reflects the benefits of AI while the drawbacks of AI-driven disruption of commerce are not. In the early 2010s, Wall Street repeatedly questioned Amazon’s ability to maintain margins in the face of its own ambition.

Where the floor is for Shopify stock is still unknown. The company continues to expand. A significant buyback is made possible by the balance sheet. In less than two weeks, earnings are received. Much of this April pessimism becomes a footnote if the Q1 guide holds and the free cash flow surprises to the upside. If it doesn’t, the 143 P/E appears to be something the market needs to overcome rather than a growth premium. In any case, the upcoming print will likely be more significant than most.