Don't let Shopify's post-earnings tumble scare you off.

Though the stock got swept up in the market's AI software fears, Shopify is uniquely positioned to lead as artificial intelligence creates a new shopping economy. Investors who hold steady through this volatility stand to gain the most.

Shopify stock sold off as much as 11% since the company posted fourth-quarter results last week. The results weren't the problem: Although earnings fell a bit short of expectations, Shopify's revenue jumped a heftier-than-anticipated 31% from a year ago. Management said it expected first-quarter revenue to grow in the low-thirties range.

The fear is that brands will prefer to use AI to create their own storefronts and to offer their products directly on chatbots such as Gemini and ChatGPT. That would reduce the need for them to sell via a middleman like Shopify.

Those fears are likely overstated. While AI may put some enterprise software companies out of business, Shopify is likely better insulated than most.

The company doesn't just provide merchants with an online storefront. It is an end-to-end service that helps them handle logistics, payments, and inventory management at a reasonable price, says Anthony Chukumba, an analyst at Loop Capital Markets.

Even if brands can use AI to make their own platforms, for many, the effort may be more trouble than it's worth. This quarter alone, Shopify began working with several large retailers, including Estée Lauder, Starbucks, Coach, and E.l.f. Cosmetics, signaling that demand is robust for its services.

J.P. Morgan analyst Reginald Smith agrees.

"The market is underappreciating the stickiness of the platform and value Shopify delivers to merchants by arming them with truly unique AI-enabled tools trained on data compiled across millions of merchants and billions of transactions," Smith wrote in a note Thursday.

The problem, Chukumba says, is that it may take several quarters for the market to come to the same conclusion. Until then, the stock could be subject to big swings if the company were to slightly miss on earnings or point to any signs of a revenue slowdown, no matter how modest.

"It's really hard to disprove a negative," he said. "They're going to have to put up several quarters of strong results before people start to realize that these fears are overblown and that they -- even in an agentic commerce world -- are still going to outperform."

The stock's valuation also remains a sticking point. Despite its 30% year- to-date pullback, it isn't cheap. It trades at about 57 times the next 12 months' earnings, well above the Nasdaq Composite's price/earnings ratio of 25.7 and the S&P 500's 23.1.

In short, the near-term outlook for the stock is cloudy. It is likely the shares haven't hit bottom, and they won't until the market's fear about software in general has abated. But the long-term balance of risks and potential rewards looks compelling.

Although many analysts lowered their one-year price target for the stock -- the average was $163.11 on Friday, down from $181.48 at the end of January -- the percentage of Buy ratings actually increased following the results. Just under 70% of analysts are now bullish on the shares, compared with 59% in late January, according to FactSet.

John Shao, an analyst at TD Cowen upgraded Shopify shares to Buy from Hold on Friday. He said that when Shopify has traded at similar valuation levels in the past, it was usually because of external factors -- such as tariffs -- and was followed by "continued execution to drive a subsequent rebound."

Shopify is trading at a significant discount from its three-year average of 107 times earnings, and even the one-year average of 76 times.

"A future valuation re-rating will occur as the broader software sector navigates the challenging narrative against it," he wrote in a research note Friday. Strong execution and faster growth from agentic commerce should position the stock for a quick recovery, Shao added.

Shopify's executives say they have been working to lay the groundwork for sales via AI agents for the better part of the past few years, and that the efforts are starting to pay off. Fourth-quarter orders stemming from AI searches were up 15-fold since January 2025, a figure that should increase as the company keeps expanding its partnerships with AI platforms such as Gemini and ChatGPT.

"To use a racing term here, we are in pole position, I think, on agentic commerce," said President Harley Finkelstein on a call with investors this week. The market may not be aware of that yet.