Shopify (TSX:SHOP) has gotten hammered in recent months. The Ottawa-based e-commerce giant is roughly 40% below its peak, caught in a brutal tech selloff that has left software stocks gasping for air. According to a recent Jefferies note, roughly 73% of software stocks now screen as oversold, the highest reading on record.
Let’s see why the ongoing sell-off in Shopify stock could be a buying opportunity.
Shopify reported strong Black Friday numbers
During Shopify’s December 2025 investor conference presentations, Chief Financial Officer Jeff Hoffmeister and Head of Investor Relations Carrie Gillard walked through a business that’s firing on multiple cylinders.
Shopify merchants generated US$14.6 billion in sales over the Black Friday and Cyber Monday weekend, up 27% year over year and 24% on a constant-currency basis.
Carrie Gillard noted at the UBS Global Technology and AI Conference that, just three years ago, in 2022, Shopify generated US$7.5 billion over the same weekend. The business has essentially doubled in three years.
What makes Shopify compelling as a forever hold is the stacking of multiple growth drivers that are all contributing simultaneously.
- International growth remains a powerhouse.
- Europe is growing in the high 30s to low 40s range, Gillard shared.
- Growth there is balanced between existing and new merchants, suggesting cohorts remain strong.
- The enterprise business continues to scale. Shopify now wins roughly four out of 10 enterprise deals, according to company disclosures.
- Recent wins include Estée Lauder and Canada Goose.
Hoffmeister explained during the Nasdaq Investor Conference that most enterprise customers don’t migrate their entire business immediately.
They might start with just payments or Shop Pay, then gradually expand. This creates a multi-year stacking function where each enterprise customer becomes more valuable over time.
Payment penetration still has room to run
Shopify Payments now penetrates 65% of gross merchandise volume flowing through the platform. In North America, that number runs much higher.
The Canadian tech stock just launched payments in 15 additional countries, mostly in Europe. As those markets mature, payment penetration should climb, creating a natural tailwind to take rates.
Gillard noted that there’s no reason why international markets can’t eventually reach the same penetration levels as North America. That’s years of runway.
The purple Shop Pay button is now being used in 67% of transactions, and international growth is running even faster than that headline number suggests.
In enterprise sales conversations, Shop Pay consistently emerges as a differentiator. Accelerated checkout drives higher conversion rates, which is critical for merchants looking to turn browsers into buyers.
But Shop Pay extends beyond just checkout. It connects to the Shop app, where consumers can track orders from multiple Shopify merchants in one place. Only Shopify merchants get access to this ecosystem.
Shopify has also positioned itself as the infrastructure layer for Agentic commerce—the idea that AI agents will shop on behalf of consumers.
The company built its product catalogue more than two years ago, specifically for this moment. When large language models search for products, Shopify’s catalogue becomes the authoritative source of truth.
Hoffmeister emphasized that Shopify is the only company building technology to help merchants succeed in Agentic commerce, not just consumers.
Is Shopify stock undervalued?
Analysts tracking Shopify stock forecast revenue to grow from US$8.88 billion in 2024 to US$26 billion in 2029. In this period, free cash flow (FCF) is projected to expand from US$1.60 billion to US$5.81 billion.
If Shopify stock is priced at 40 times forward FCF, which is below its one-year average of 77 times, it should gain 60% over the next three years.
Shopify is 40% below its highs, not because the business has failed. It’s down because software stocks got crushed in an indiscriminate selloff.
The company has just doubled Black Friday sales in three years, is winning enterprise deals at a 40% clip, and is perfectly positioned for the Agentic commerce wave coming.
For investors building forever portfolios inside Tax-Free Savings Accounts or Registered Retirement Savings Plans, this pullback created an entry point. Shopify isn’t going anywhere. The platform is too embedded, the merchant ecosystem too strong, and the innovation pipeline too deep.
Sometimes the best investments come when everyone else is selling.
