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Why Shopify Stock Is Rising Today

By Chris Neiger – Updated Sep 9, 2020 at 1:34PM

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Investors are buying shares again as the tech sector bounces back.

What happened

The stock of Shopify (SHOP -2.22%) is jumping today as the tech sector rebounds following several days of a sell-off. Shopify's stock was up by as much as 5.7% before losing some ground. As of 12:47 p.m. EST on Wednesday, it was up 4.2%. 

So what 

The tech sector is starting to make gains again after a sell-off. Shopify's stock fell 19% between Sept. 2 and 8. Before the sell-off, technology stocks had surged over the past few months as investors bet that many of the services that tech companies offer would become essential during the coronavirus pandemic.

A chart with red and green line graphs.

Image source: Getty Images.

Shopify has certainly grown during the pandemic and had one its best quarters recently, and businesses of all sizes have looked to the company to help them set up online shops. As businesses flocked to Shopify's e-commerce platform, investors rushed to the company's stock. 

Including today's gains, the stock is up 140% this year.

Now what 

It's important for investors to know that Shopify's volatility over the past few trading days doesn't have anything to do with the company's underlying business. Tech stocks have surged over the past few months, then pulled back for a few days, and now appear to be rising again. All of this means that while Shopify could be a great long-term tech play, the stock could still experience some wild swings in the coming months.

Chris Neiger 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.

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