Preheat the oven to 425°F.
Heat the olive oil in a large oven-safe skillet over medium heat. Add the sliced shallot and sauté for 2 minutes, until softened and translucent.
Add the garlic and cook for another 30–60 seconds, stirring frequently, until fragrant but not browned.
Add the canned tomatoes and season generously with salt and freshly cracked black pepper. Bring to a gentle simmer and cook for about 10 minutes.
Meanwhile, bring a large pot of generously salted water to a boil. Add the gnocchi and cook just until they rise to the surface (about 2 minutes).
Once the sauce has slightly reduced, add half of the torn mozzarella and half of the fresh basil. Stir gently to combine.
Using a slotted spoon, transfer the gnocchi directly from the boiling water into the tomato sauce. Gently toss until evenly coated. If your skillet isn't oven-safe, transfer everything to an oven-safe baking dish.
Scatter the remaining fresh mozzarella evenly over the gnocchi. Bake at 425°F for about 15-20 minutes, until the tomato sauce is bubbling and the mozzarella is melted and golden.
Remove from the oven and let rest for a minute. Finish with a drizzle of extra virgin olive oil, freshly cracked black pepper, and the remaining fresh basil.
Serve hot while the mozzarella is still melty and gooey.