Shares of Shopify rallied after the company forecast that its recent uptick in sales growth would carry through to the third quarter as it captures more ecommerce volume and incorporates more artificial intelligence into its operations.

The company, whose platform lets businesses sell, manage orders and process payments online, on Wednesday reported sales growth of 34% in the latest quarter, handily topping its outlook for a rate in the high-twenties percentages. For Shopify's current quarter, it projected sales to grow at a low-thirties-percentage rate, well ahead of Wall Street consensus of about 27%, according to FactSet.

The results and outlook helped ease investor anxieties that weighed on the company earlier this year, when management signaled a potential sales slowdown.

In midday trading, Shopify stock was up 19%, to $146.57, on the Nasdaq, on pace for its largest gain in over a year. The rally also helped the TSX index rise to a fresh high earlier Wednesday. Shares rose 19%, to 205.74 Canadian dollars (US$146.32), in Toronto.

Shopify's momentum was helped by a 32% surge in gross merchandise volume--a measurement of the total value of goods sold across its platform--which reached $115.57 billion in the second quarter.

"This is commerce at an extraordinary scale, flowing through the platform, and it also tells us that our merchants are thriving," President Harley Finkelstein said on Wednesday's earnings call.

Shopify is also seeing an early boost from AI, particularly among smaller merchants, which make up the majority of its customers. Finkelstein noted that AI-driven traffic and order volumes have tripled year-over-year.

Analysts at Deutsche Bank praised the results: "Doesn't get much better than this." They said that despite mixed sentiment going into the quarter, the results and outlook can tilt the narrative toward reaccelerating growth, rather than a slowdown.

For the quarter ended June 30, Shopify reported net income of $1.5 billion, or $1.16 a share, compared with $906 million, or 69 cents a share, in the comparable quarter a year ago. On an adjusted basis, earnings came to 42 cents a share, topping forecasts of 40 cents a share.

Revenue came in at $3.58 billion. Analysts expected $3.45 billion.

The growth in revenue was driven by a strong performance across both subscription solutions, where revenue rose to $802 million from $656 million, and merchant solutions, its largest unit, with revenue of $2.78 billion, up from $2.02 billion.

As well as the rosier revenue expectations for the third quarter, Shopify expects gross profit dollars to grow at a mid- to high-twenties-percentage rate, with free cash flow margin expected to be in the high teens to low twenties. Operating expenses are projected to be in the range of 33% to 34% of revenue.