Shopify Inc. (SHOP) just dropped its Winter 2026 Edition, and if you read between the lines, there's something interesting happening with artificial intelligence that Wall Street might be sleeping on.
JPMorgan analyst Reginald L. Smith maintained his Overweight rating on the stock, but what caught his attention wasn't just the usual platform updates. It was Sidekick, Shopify's AI assistant, which Smith thinks represents "meaningful long-term monetization potential that the Street has yet to factor into estimates." That's analyst-speak for "this could be worth more than people realize."
Why Sidekick Matters More Than You Think
Here's the thing about Sidekick: it's not trying to be everything to everyone. Instead, Shopify has designed it specifically for small and midsize merchants who don't have massive teams but still need to compete with bigger players. The AI assistant is now deeply integrated into Shopify Admin, handling content creation, data analysis, and operational tasks that would otherwise eat up hours of a small business owner's day.
But the real upgrade is Sidekick Pulse. Instead of waiting for merchants to ask questions, it now proactively sends personalized growth recommendations and action steps. Smith called this evolution "powerful and central to Shopify's competitive edge at the SMB level." Think of it as shifting from a help desk to a business consultant that actually knows your numbers.
For small teams that need to scale without hiring more people, that's exactly the kind of efficiency tool that could justify staying on Shopify's platform even as the business grows.
Shopping Where the Shoppers Are
Shopify is also making a strategic bet on what it calls "agentic commerce," which basically means enabling purchases wherever people happen to be browsing online. The company has partnered with OpenAI, Perplexity, and Microsoft Corp. (MSFT) Copilot to let consumers complete Shopify checkouts directly inside AI chat interfaces.
Smith compared this move to earlier breakthroughs in social commerce. The logic is straightforward: if people start shopping through conversational AI the way they currently shop through Instagram or TikTok, Shopify wants its checkout infrastructure embedded in those experiences from the start.
Another clever addition is the Shopify Product Network. This feature lets merchants display complementary products from other sellers on their own storefronts and earn commissions on those sales without touching inventory, shipping, or customer service. It's essentially creating a passive revenue stream for merchants while expanding product selection for customers.
The Checkout and Retail Upgrades
Shopify rolled out several checkout improvements that should please both merchants and their partners. Shop Pay Installments launched in the U.K., which Smith noted also benefits Affirm Holdings, Inc. (AFRM). The company added Apple Inc. (AAPL) Pay within Shop Pay and expanded Klarna's availability to nine additional European markets, giving merchants more payment flexibility to offer customers.
On the physical retail side, Shopify introduced POS Hub, a USB-based hardware accessory designed to stabilize connections between scanners, card readers, and printers. Smith expects this to become increasingly important as Shopify expands its footprint in brick-and-mortar retail.
The update also included geographic expansion of Shopify Capital into the Netherlands, Spain, and Ireland; the ability for customers to earn USDC-based credits; a new deals feed in the Shop App highlighting discounts for shoppers ready to buy; and additional global carrier and logistics integrations across the Shopify Fulfillment Network.
What ties all these updates together is Shopify's attempt to be indispensable across the entire commerce stack, whether merchants are selling online, in-store, or through AI chat interfaces. The question is whether Wall Street will eventually price in the value of tools like Sidekick that could lock in merchant loyalty as AI reshapes how small businesses operate.
SHOP Price Action: Shopify shares were down 3.41% at $162.66 at the time of publication on Thursday, according to market data.