Please ensure Javascript is enabled for purposes of website accessibility

Why Shopify Stock Jumped on Thursday

By Daniel Sparks - Jun 17, 2021 at 3:21PM

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

The tech stock has seen impressive momentum in recent weeks.

What happened

Shares of e-commerce platform specialist Shopify (SHOP -1.18%) jumped sharply on Thursday. The stock rose as much as 6.9% and was up 5.6% as of 2:55 p.m. EDT.

The stock's gain was likely driven primarily by a bullish day in the market for tech stocks -- particularly for growth tech stocks like Shopify.

Shopify announced this week that it is rolling out Shop Pay to all merchants across Facebook, Instagram, and Google this year.

Image source: Shopify.

So what

Highlighting optimism for tech stocks on Thursday, the tech-heavy Nasdaq Composite was up 0.9% as of this writing, even as the S&P 500 dipped about 0.1%. Many growth stocks, however, rose several percentage points.

Though broader-market indices like the S&P 500 and the Nasdaq Composite have been trading around all-time highs recently, many growth stocks haven't fully recovered from a growth stock-focused sell-off earlier this year. But Shopify shares have surged recently as investors seem to be applauding the company's business momentum and some of its recent integrations with tech giants Facebook and Alphabet.

Now what

On Tuesday, Shopify announced that its mobile payments technology Shop Pay is coming to Facebook, Instagram, and Alphabet's Google this year. "Shop Pay will be available to more than 1 million merchants across [Facebook, Instagram, and Google] -- even if they don't use Shopify's online store," management said in a press release.

New partnerships like this and the company's incredible 110% year-over-year revenue growth in Q1 have driven investor optimism for shares recently -- and that seems to be carrying into today's rally for growth tech stocks.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Shopify. His clients may own shares of Shopify. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Facebook, and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on 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.
$36.86 (-1.18%) $0.44
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$174.66 (-0.11%) $0.19
Alphabet Inc. Stock Quote
Alphabet Inc.
$120.17 (0.52%) $0.62
Alphabet Inc. Stock Quote
Alphabet Inc.
$120.86 (0.45%) $0.54

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/18/2022.

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.