Shopify shares slide 9% on slower Q2 forecast and higher AI costs
Updated
Updated · The Information · May 5
Shopify shares slide 9% on slower Q2 forecast and higher AI costs
5 articles · Updated · The Information · May 5
The company forecast second-quarter revenue growth in the high twenties, below 31% a year earlier, after first-quarter revenue rose 34% to $3.2 billion.
Shopify said growing use of its Sidekick AI tool lifted large language model, cloud and infrastructure costs, helping keep software gross margins flat at 80% despite efficiency gains.
Software business costs rose 20% to $148 million, while CFO Jeff Hoffmeister said planned money transmitter licences could help expand lending and merchant account services.
Can Shopify's costly pivot into financial services rescue its growth as AI expenses continue to mount?
As AI costs rise, can Shopify fix its 'hallucinating' tools before merchants lose trust in the platform?