Shopify price increases may add $40m revenue in JPMorgan call

Shopify raised U.S. merchant prices for its Grow plan by 13% and Advanced plan by 20% on Oct. 15, JPMorgan analyst Bryan Smilek wrote in a Friday note reported by Benzinga.

The call matters because Smilek estimates the changes could add more than $40 million in annualized revenue over time, against more than $90 million expected from Shopify Plus increases scheduled for 2027.

JPMorgan kept an Overweight rating on Shopify and a $200 price forecast, which Smilek most recently raised on Oct. 6, according to Benzinga. The shares were down 4.51% at $170.11 at the time of Benzinga's Friday publication.

The bank's estimate rests on two assumptions: about 65% of non-Plus merchants use monthly plans, and the new prices are eventually extended globally. JPMorgan tracked the U.S. pricing changes against levels seen in early October.

Where pricing helps

Smilek's argument is that Shopify can raise subscription prices while retaining merchants because the platform remains central to online selling, payments and merchant services. JPMorgan expects limited churn among both small and midsize business merchants and Plus merchants from the price changes, Benzinga reported.

The Grow plan price rose by $10, or 13%, while Advanced rose by $60, or 20%, according to the note. Those increases apply to plans used below Shopify Plus, the company's higher-tier offering for larger merchants.

JPMorgan also expects already announced Shopify Plus price increases to add more than $90 million in annualized Subscription Solutions revenue in 2027. Subscription Solutions is Shopify's revenue line tied to merchant subscriptions and related platform fees.

The bank raised its estimates for the second half of 2026 and 2027 by about 1% to 3% for revenue, about 1% to 2% for gross profit and about 1% to 2% for free cash flow, according to Benzinga. Free cash flow is cash generated after capital spending.

Smilek's view also includes a strategic element: JPMorgan said Shopify should keep focusing on merchant experience while expanding gross merchandise volume and gross payments volume, measures of goods sold through merchants and payments handled by the platform.

AI costs remain drag

The risk in the note is not demand alone. Smilek estimated that AI and token consumption could create a 180-basis-point year-on-year headwind to 2026 Subscription gross margin and an almost 40-basis-point headwind to total gross margin. A basis point is one-hundredth of a percentage point.

JPMorgan expects the Plus price increases to produce high-margin monthly recurring revenue and help offset those AI-related costs. Tokens are the units processed by AI models, and higher use can raise computing expense.

Smilek described Shopify as well positioned to benefit from AI across what he called the three layers of the agentic commerce stack: Channels, On-Platform and Infrastructure, according to Benzinga. The note cited Shop Pay on Muse, where buyers keep control and Shopify provides a connector that lets merchants manage orders, inventory and analytics directly in Muse.

The bullish call sits above the broader analyst average cited by Benzinga. Wall Street's average Shopify price forecast is $171.38, with a consensus Buy rating, while JPMorgan's target is $200.

Other firms cited by Benzinga also remain constructive, though not uniformly so. RBC Capital maintained an Outperform rating with a $200 forecast on Oct. 16, Baird maintained an Outperform rating and raised its forecast to $190 on Oct.

14, and Cantor Fitzgerald maintained a Neutral rating with a $158 forecast on Oct. 12.

Earnings expectations give investors the next operating yardstick. Wall Street expects Shopify to post third-quarter earnings of 46 cents a share, up from 34 cents a year earlier, on revenue of $3.75 billion, up from $2.84 billion, though Benzinga did not provide a reporting date.

Shopify's third-quarter earnings report is the next operating test cited in the Benzinga report. The checkable figures are Wall Street expectations for earnings of 46 cents a share and revenue of $3.75 billion, compared with 34 cents and $2.84 billion a year earlier.

In 2027, already announced Shopify Plus price increases are scheduled to take effect. JPMorgan expects those changes to add more than $90 million in incremental annualized Subscription Solutions revenue during 2027.

The other observable is whether the Oct. 15 U.S. price increases for Grow and Advanced plans are extended globally.

JPMorgan's more than $40 million annualized revenue estimate assumes eventual global rollout, but Benzinga reported no date for that step.