Shopify Inc. (SHOP.TO, SHOP) was upgraded to Outperform from Sector Perform at ATB Cormark Capital.

Analyst Martin Toner maintained a price target of $250 on shares of the Ottawa-based ecommerce company ahead of its Q4 results on Wednesday.

"The broader SaaS landscape is struggling with slowing growth and rising AI risks," Toner said in a note to clients. "The M7 face margin compression from massive AI infrastructure spend."

"We believe Shopify is sitting in attractive territory and is well positioned to be a capital light beneficiary from AI," the analyst said.

"Our upgrade is driven by: I. Structural Operating Leverage: while margins are contracting in other parts of the value chain, we see upside to SHOP's high teens FCF margins. II. The Agentic Commerce Multiplier: while it is too early to see in the data, we believe Shopify's agentic commerce stack has strong growth potential. III. META's ~1,000 bps Q1/26 revenue growth acceleration is a positive read-thru for SHOP's Q1/26 guide. and IV. Attractive Return to Target: at current levels, investors can own the de facto winner in ecommerce, that is growing at 25% +, with a strong FCF trajectory."

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