Shop This Stock Till the Bots Drop

Author

Noah Zelvis
August 23, 2025

A stock that once defined the pandemic boom has come roaring back, rising nearly 80% in the past year.

With accelerating revenue growth, expanding subscription solutions, and new AI-driven services, the setup could reward investors who are willing to buy at a premium.

Positioning For The Operating System for Online Retail

Shopify (NASDAQ: SHOP) has evolved from a storefront software company into a global e-commerce and payments ecosystem.

Its platform helps merchants of all sizes set up online stores, process payments, manage inventory, and now advertise directly to customers.

The company benefits from a flywheel effect: more merchants adopt its tools, which drives higher payment volume, which in turn leads to higher revenue for Shopify as it takes a cut of every transaction.

The latest chapter in this evolution is AI. Shopify has begun integrating AI query tools that allow chatbots to pull product listings directly from merchant sites.

It is also expanding its Shop mobile app into a consumer-facing marketplace that aggregates products from Shopify merchants.

This is a bold move into Amazon’s territory, but one that could expand Shopify’s addressable market far beyond software subscriptions.

Action: Investors can consider accumulating shares between $130 and $140, positioning for a potential breakout if the Shop app and AI integrations gain traction.gnals.

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Momentum and Growth Drivers: Back on a High-Growth Trajectory

After a slowdown in 2022 and 2023, Shopify’s growth engine is running hot again.

In Q2 2025, revenue rose 31% year over year to $2.68 billion, an acceleration from 21% growth in the same quarter last year.

Total payment volume hit $327 billion over the past 12 months, reflecting widespread adoption across both small businesses and enterprise clients.

Enterprise adoption has been particularly strong.

Names like Starbucks and Canada Goose have chosen Shopify’s platform, showing that the company is no longer just a tool for small businesses.

European expansion is also contributing, with payment volume in the region rising 42% year over year, far outpacing overall company growth.

The Subscription Solutions segment, which includes platform fees and higher-tier plans like Shopify Plus, posted $656 million in revenue in Q2, up 16.5%.

Monthly Recurring Revenue climbed to $185 million, with Plus making up 35% of the total. These higher-margin services provide stability and support long-term profitability.

Action: Watch for Q3 earnings to confirm continued acceleration in Europe and enterprise adoption.

If subscription revenue rises another 15% or more, that will be a signal of sustained strength.

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Expanding Beyond Core Commerce: Ads and the Shop App

Shopify is no longer content with powering transactions behind the scenes.

The company is entering advertising through Shopify Campaigns, which allows merchants to promote their products across platforms like Google, Instagram, and within the Shop app.

This diversifies revenue while helping merchants acquire customers more efficiently.

The Shop app is another ambitious project. Acting as a consumer-facing marketplace, it aggregates products from Shopify merchants and offers discovery tools, tracking, and payment integration.

While still early, the app represents Shopify’s attempt to build a direct relationship with consumers, not just merchants.

If successful, it could meaningfully increase engagement and open up new revenue streams.

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Paying Up for Growth

The challenge is valuation. Shopify trades at a forward P/E near 76 and a forward price-to-sales ratio above 14, compared to an industry average closer to 10.

At a market cap approaching $180 billion, the company is priced for perfection.

Supporters argue that Shopify deserves this premium. Gross margins hover near 49%, operating margins are climbing above 15%, and revenue is expected to grow 25 to 30% in 2025.

If scale continues to improve profitability, earnings growth could outpace revenue over the next few years.

Critics counter that the stock is already discounting years of strong execution.

Many investors who bought at the 2021 peak near $170 remain underwater, and any growth stumble could bring a sharp multiple contraction.

Action: Long-term investors can justify owning Shopify at these levels, but position sizing is key.

Consider keeping allocations modest and use dips below $130 as add-on opportunities.

Technicals Are Testing Resistance After a Strong Run

Shares are trading near $137, up 27% year to date. The stock has tested resistance around $143–$145 several times, with the 52-week high at $156.85.

Support sits around $125, with stronger backing near $110, which marked the breakout level earlier this year.

Volume has declined in recent weeks, suggesting investor interest has cooled since the post-earnings surge.

This could set up volatility if the next catalyst is negative. Still, the long-term trend remains intact, with the stock well above both its 50-day and 200-day moving averages.

Institutional and Analyst Sentiment

Institutional ownership is strong, and hedge fund activity reflects ongoing interest in the stock.

Analysts remain divided, though the consensus leans bullish. Price targets range from $120 on the low end to $160 on the high end, with a median near $145.

Recent commentary has focused on the Shop app and advertising services as the next major growth vectors.

Some firms caution on valuation, while others highlight Shopify’s ability to consistently outpace global e-commerce growth rates.

Risks to Watch

  • Valuation risk: At 76 times forward earnings, any growth hiccup could trigger a sharp pullback.

  • Competition: Amazon, Wix, and Commerce.com are all investing in e-commerce tools.

  • Execution risk: Scaling advertising and the Shop app requires flawless execution.

  • Liquidity concerns: Lower trading volumes recently could amplify volatility during downturns.

  • Macro sensitivity: Slower consumer spending could impact merchant sales and payment volume.

Final Word: A Growth Giant at a Price

Shopify remains one of the fastest-growing companies in global e-commerce.

With accelerating revenue, strong subscription growth, expanding services, and new consumer-facing initiatives, it is firing on multiple cylinders.

The risk is valuation, but for investors who believe in the long-term trajectory of online retail and AI-enabled commerce, Shopify offers rare exposure.

Patience and discipline are required, but for those willing to ride out volatility, the potential rewards could be significant.

Action Recap

✅ Initiate or add to positions between $130 and $140 ahead of Q3 earnings
✅ Watch for subscription revenue growth of 15% or more as a key confirmation signal
✅ Target $145–$150 as the next resistance level, with $160 as a longer-term objective
✅ Add on dips below $130, and use $110 as a stop-loss zone for risk management
✅ Track adoption of the Shop app and advertising services as leading indicators of future growth

That's our coverage for today; thanks for reading! Reply to this email with feedback or any tech stocks you want me to check out.

Best Regards,
—Noah Zelvis
Tech Stock Insider