Rise of AI chatbots for shopping boosts analyst hopes for Shopify's growth (www.theglobeandmail.com)

The emergence of AI chatbots for online shopping, particularly through platforms like ChatGPT, has led to increased optimism for Shopify's growth, prompting Bank of Nova Scotia analyst Kevin Krishnaratne to upgrade the company's stock rating from “neutral” to “outperform” with a target price increase from $165 to $200. This shift highlights the potential for AI agents to attract new customers to e-commerce by providing personalized product recommendations, which could significantly enhance revenue streams for Shopify and its merchants. Analysts point out that AI can level the playing field for smaller retailers by offering recommendations that outperform traditional search methods, thereby unlocking new retail opportunities. Additionally, the integration of large language models in commerce is poised to redefine advertising dynamics by shifting how consumers interact with digital platforms. As online shopping evolves toward chatbot interfaces, it presents an emerging challenge for traditional search engines like Google, which may see a change in search advertising dynamics. This transition may open up new avenues for ad spending, giving sellers the flexibility to target users in novel ways, though the challenge remains in maintaining user trust while integrating advertising within these AI interfaces.