( NASDAQ:SHOP ) reported earnings that beat expectations and provided strong forward guidance, but shares fell 6% on Feb. 11, 2026, as investors focused on software sector earnings and broader AI concerns.
Shopify posted revenue of $3.67 billion in the quarter, beating the Zacks’ consensus estimate of 2.55%. That compares to revenue of $2.81 billion a year ago. The revenue growth was helped by strong holiday shopping activity.
The Canadian e-commerce company posted adjusted earnings per share of 48 cents, missing the Zacks Consensus Estimate of 50 cents per share, though ahead of earnings of 44 cents per share a year ago.
AI Investment Weighs on Near-Term Margins: Should You Buy the Dip?
The company forecast free cash flow margins in the “low to mid-teens” for the first quarter, down slightly from year-ago levels. Chief Financial Officer Jeff Hofmeister attributed the soft margin outlook to continued investment in artificial intelligence (AI) tools.
Shopify, which sells software to help businesses launch and run their online storefronts, has seen shares slide this year, with the stock down 29.2 percent over the past month. The recent software stock selloff led by AI fears has hit Shopify hard.
However, Shopify president Finkelstein believes some fears of AI-led software’s rout are exaggerated, stressing that companies that serve as platforms and infrastructure are better positioned than feature-based providers, as quoted on CNBC.
GMV exceeded expectations.
Shopify’s gross merchandise volume (GMV), which measures the total value of goods sold through its platform, rose 29% year over year to $123.8 billion, beating analysts’ estimates of $121.3 billion, according to FactSet data, as cited in the same CNBC article.
Improved Outlook and Buyback Program
Shopify expects first-quarter revenue to grow in the “low thirty percent range” year over year, topping analysts’ expected growth of 25.1 percent, according to FactSet, as noted in the CNBC article mentioned above.
Shopify’s board also approved a $2 billion share repurchase program. A buyback program usually indicates management’s confidence in its stock. The stock is not highly leveraged. While these factors are positive for an investment in SHOP, the stock price is quite high – a concern.
Within value
The stock trades at a price/earnings ratio of 92.20X on a trailing-twelve-month basis, versus the 28.44X one recorded by the Internet – Services industry. The price-to-book ratio is also higher at 13.24X versus 1.97X the one held by the underlying industry.
ETFs in focus
Against this backdrop, investors should look to Shopify-heavy ETFs such as the ARK Blockchain & Fintech Innovation ETF (ARKF), and . The basket approach often minimizes company-specific concentration risks. However, any move into internet and fintech stocks and ETFs now requires caution, as AI-led fears can occasionally emerge. ARKF and FDNI lost more than 3% and 2% respectively on 11 February 2026.
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This article was originally published on Zacks Investment Research (zacks.com).