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This NFT-Wielding E-Commerce Stock Is Top of My Watch List

By Rachel Warren - May 12, 2022 at 3:14PM

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Customers can buy both physical and digital goods on this marketplace.

In this clip from "The Virtual Opportunities Show" on Motley Fool Live, recorded on April 26, Motley Fool contributor Rachel Warren shares why Shopify (SHOP -10.36%) is her top e-commerce stock, and one bit of news that makes it an even more compelling investment.

 

Rachel Warren: On the topic of Shopify, there was one kind of aspect of the business that I was looking into a little bit more lately -- that I feel like sort of happened without great fanfare? And that was that certain sellers can actually sell NFTs on Shopify. Maybe I was just, you know, under a rock when this happened and didn't know. But my understanding is this is a program that still in beta. There's only specific tiers of sellers. I think the ones that pay the like $2,000 a month subscription fee that have access to this. But you can actually, through this program -- and I would imagine that the goal is to expand it out to a broader potential user and seller base in the future -- but you can mint and sell your own branded NFTs with Shopify. 

You know, this is a very thriving market that's had, you know, 700%-plus market growth between the second quarter of the third quarter of 2021. That's one of the stats that they cite. And one of the things that's interesting about this beta program Shopify has, is they say, you know, sell NFTs your way, whether you're using credit cards, cryptocurrency. There's this idea here where, you know, you can sell physical products on Shopify, but could there be a move over the next five, 10, 15 years even, where it's commonplace to buy digital versions of those products or just digital assets as a whole on Shopify. So, really interesting kind of aspect of its business. Obviously still a very, very, very small part of its business. 

Shopify has partnered with a variety of apps to enable users to mint NFTs on popular blockchains like Ethereum and Polygon. And then, again, they've made this really kind of expansive way of accepting payments, whether it be, you know, crypto gateways, Shopify payments, or even credit and debit cards, which a lot of the platforms still don't allow that type of payment processing. So I'm curious to see whether this could become kind of a bigger part of Shopify's overall business, you know, in the years ahead. As mentioned, right now, at this point in time, it's a very, very, very small slice of its overall business. 

But is a whole, I love Shopify. You know, 2021 was a really great year for the company. They rolled out a host of really interesting updates, you know. In addition to having really great profits as well as revenue growth, they introduced something called TikTok shopping to merchants. So merchants with a TikTok for business account can add products that link directly to their online store at checkout. Shopify had also launched something that I wasn't aware of called the Spotify Channel. So if you have artists, entrepreneurs on Spotify that one that account with their Shopify online store and they could use that wanted to connect that account that with their Shopify online store, and they could use that to kind of sync their product catalogs. I just love all the different ways in which Shopify continues to expand its business and make its platform more valuable to its customers and merchants. 

So this is one company that I continue to have a lot of faith in. I am very excited to see, you know, what the first quarter of the year held for the company, what kind of guidance they're giving for upcoming quarters. I'm trying to normalize my expectations a little bit, because I think we have seen a lot of growth factored in a short period in stocks like Shopify, but I still think there's a lot of runway left for this company. So Shopify's definitely one of the top stocks I'm watching.

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