By Adriano Marchese

Shopify shares rose Friday morning after TD Cowen raised its target price on the stock as it resumed coverage.

Shares traded 4.6% higher in New York at $158.17, and 4.7% higher in Toronto at 221.07 Canadian dollars ($158.26).

TD Cowen analyst Daniel Chan said in a report that Shopify continues to demonstrate strong growth as well as opportunities to expand, particularly international. The bank has restarted coverage of the e-commerce platform with a hold rating, but updated its price target to $156 from a previous $130.

"Shopify's execution across Europe has been exceptional," Chan said, pointing to gross merchandise volume in Europe that grew 42% in the second quarter, implying market share gains. "We expect this momentum to persist into the midterm as Shopify's presence is early in these markets."

Chan also thinks that Shopify's market leadership could help it benefit from the wave of artificial intelligence in consumer settings, pointing to its recent partnership with OpenAI to provide retailers with new ways to reach consumers.

"It is Shopify's market leadership and platform-agnostic approach to AI that we believe will allow it to adapt and maintain leadership should consumers change buying behavior," Chan said.

However, the analyst noted that some macroeconomic risks still linger in the background, which offsets what Chan calls an enviable market position and financial position. Investors, he thinks, have priced in 25% revenue growth and free cash flow margin of 26% by 2033.

"While this implies the market is assuming Shopify can grow at the top end of the software leader's peer group rate, achieving this financial performance would only imply that the shares are fairly valued," he said.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

October 03, 2025 10:10 ET (14:10 GMT)

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