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Why Shopify Stock Jumped Today

By Chris Neiger - Dec 16, 2020 at 2:09PM

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Investors are continuing their optimism in this e-commerce company.

What happened

Shares of Shopify ( SHOP -4.08% ) were trading higher today on seemingly no company-related news. Investors are likely continuing their positive sentiment toward the e-commerce platform company as businesses continue to rely on Shopify to sell their goods and services online during the pandemic.

The tech stock was up by as much as 8.4% today and had gained 6.7% as of 1:54 p.m. EST.

So what 

Shopify's stock has surged this year as lockdowns and social distancing pummeled in-store shopping, leaving many businesses to turn to e-commerce sales to sell their goods and services. Investors followed them to Shopify and have pushed the company's share price up 195% this year. 

Stacked blocks with arrows on them.

Image source: Getty Images.

The company's share price shot up 18% last month after Shopify released its third-quarter earnings report on Oct. 29. Revenue spiked 96% in the quarter, thanks in part to a 48% jump in the company's subscription solutions segment.  

Speaking about the company's growth in the quarter, Shopify CFO Amy Shapero said: "The pandemic has fast-tracked commerce to digital domains, and there is incredible demand on both the merchant and consumer sides to enhance the commerce experience. Shopify is in a unique position to help entrepreneurs in this emerging landscape." 

Now what 

Investors may be continuing their optimism for Shopify's stock today because, even with newly approved vaccines, the coronavirus pandemic continues to rage on. Some states and countries are returning to strict lockdowns, which means that many businesses are still very reliant on e-commerce sales. All of which means that demand for Shopify's platform will likely be strong at least until the pandemic is fully in the rearview mirror.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Shopify Inc. Stock Quote
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$1,459.71 (-4.08%) $-62.08

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