Shopify (SHOP), the company that powers much of ecommerce outside of Amazon (AMZN), gapped up 17% to its highest level in seven months on Wednesday, following the Canadian company’s successful second-quarter results.
Shopify reported net income of $1.5 billion, up 66% YoY, on revenue of $3.58 billion. The latter figure surged 34% YoY and beat the consensus by $140 million.
Subscription revenue increased 22% YoY, while Merchant revenue rose 37% over that period.
Shopify shines in Q2, but equity investments continue to lead the way
The net income figure was belied by the fact that two-thirds of it came from the increasing value of Shopify’s equity investments. Excluding the equity investments, Shopify reported net income of $439 million, up 30% from the year-ago figure of $338 million.
For those in the know, this should draw comparisons to Alphabet’s (GOOGL) recent quarters that also saw a sharp rise in the value of that company’s investment in Anthropic.
Shopify’s free cash flow margin rose to 18% in Q2 from 16% one year earlier. Shopify’s gross merchandise value reached $115.6 billion, up 32% YoY, in the three months ending in June. Gross profit surged 31% YoY to $1.7 billion, while operating income jumped 68% in that period to $488 million.
For the third quarter, management expects revenue to continue growing at a “low-thirties percentage rate” on an annual basis with gross income clocking in at a “mid-to-high twenties percentage rate”.
In an interview with Fox Business, Shopify President Harley Finkelstein said AI-driven orders tripled over the past year as shoppers increasingly turn to artificial intelligence (AI) for product discovery and purchases.
Shopify stock chart
Shopify’s gap up on Wednesday places it right in the middle of two interesting levels. On the topside, there’s the $156 level that started out as resistance in August 2025 and then flipped into support later in the year through January 2026. On the bottom side lies the $136 level that acted as support in August 2025 before turning into resistance earlier this year.
In a general sense, Shopify stock hasn’t really gone anywhere in a year. It’s right back where it was one year ago.
But if we look at the share price dynamic back in August 2025, we see another major gap up off earnings (yellow circle). That gap up made it to the $156 level, above Wednesday’s price action, before shifting lower and finding support around $136. From there Shopify stock launched a rally that terminated in the $176-$182 resistance zone that got its start all the way back in 2021.
Traders’ best bet is to wait for a similar pattern, and new entrants should wait for consolidation near $136. If SHOP makes it past $156, then the $168-$173 supply zone will likely come into play.
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