Please ensure Javascript is enabled for purposes of website accessibility

Why Shopify Stock Surged to a New All-Time High Today

By Joe Tenebruso – Jul 29, 2020 at 4:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

E-commerce sales are booming.

What happened

Shares of Shopify (SHOP 4.99%) jumped 7% to a new closing high of $1,053.59 on Wednesday, following the release of the commerce platform's blockbuster second-quarter results.

So what

The coronavirus pandemic and related social distancing guidelines are driving more people to shop online than ever before. Businesses, many of which, were forced to close during the COVID-19 crisis, are rushing to migrate their operations to the internet.

And Shopify is helping them do so.

"The world is changing fast," CEO Tobi Lutke said in a press release. "With the rapid shift to online commerce, massive disruption to conventional employment, and growing conviction that opportunity needs to be more evenly distributed, entrepreneurship has never been more important."

A person is holding an upwardly sloping digital chart.

Shopify's stock rose to a record high on Wednesday, as investors cheered its impressive Q2 results. Image source: Getty Images.

Merchants, in turn, are flocking to Shopify's platform. New store creations surged 71% sequentially. And these stores are collectively generating much greater sales. Shopify's second-quarter gross merchandise volume (GMV) -- essentially, the total amount of sales merchants made on its platform -- soared 119% year over year to $30.1 billion. Shopify's revenue, meanwhile, surged 97%, to $714.3 million.

All told, Shopify's adjusted net income came in at $129.4 million, or $1.05 per share, up from $10.7 million, or $0.10 per share, in the prior-year period.

Now what 

Shopify's ascent has been breathtaking. After today's gains, its stock is now up 165% year to date, 213% over the past year, and 4,000% since its 2015 initial public offering (IPO). With powerful trends such as the global growth of e-commerce and entrepreneurship fueling its expansion, Shopify appears poised to deliver even more gains to investors in the coming years.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Shopify. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Shopify Inc. Stock Quote
Shopify Inc.
SHOP
$29.24 (4.99%) $1.39

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.