Shopify shares were down about 2% in early trading as investors fretted over its weaker-than-expected current-quarter profit forecast
posted its best quarterly revenue growth in three years on Tuesday, as healthy consumer spending and the e-commerce company’s efforts to load its platform with AI features for sellers helped drive strong holiday sales.
Shopify has been investing heavily in building out AI-based tools that help its merchants with tasks ranging from image generation to inventory management, offering its ‘Shopify Magic’ suite of AI features across all subscription tiers for free. But Shopify’s investments into tech and expansion along with its partnership with companies such as PayPal are causing worries around margin growth. The company saw higher cloud and infrastructure hosting costs in the fourth quarter, CFO Jeff Hoffmeister said on a post-earnings call.
Shopify expects gross profit dollars to grow at a low-twenties percentage rate in the current quarter, weaker than the 24.2 per cent growth expected by analysts according to Visible Alpha.
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