Despite all the political and trade drama that has occurred in 2025, e-commerce platform Shopify (SHOP) has demonstrated incredible resilience. Over the past month alone, the stock has climbed an impressive 33.6%, driven in part by renewed investor optimism following a 90-day pause on most tariffs between the U.S. and China. This temporary truce sparked renewed enthusiasm across markets, lifting investor appetite for high-growth names like Shopify. 

Adding fuel to the rally, shares of the Canadian commerce platform jumped 13.7% on May 12 following news that Shopify is set to join the prestigious Nasdaq-100 Index ($IUXX) and the Nasdaq-100 Equal Weighted Index, replacing MongoDB (MDB). This index inclusion, effective before the market opens on May 19, is expected to generate fresh demand from institutional funds and ETFs that track the Nasdaq-100, potentially offering a significant tailwind for the stock.

This elevated status not only enhances the company’s visibility among global investors but also underscores its growing influence among an elite group of industry leaders in the digital commerce landscape. So, as global investors take notice and index funds gear up to buy in, the countdown to May 19 sets the stage for a pivotal moment in Shopify’s growth story.

About Shopify Stock

Shopify (SHOP) is a global leader in e-commerce, providing the backbone for businesses of all sizes with tools to start, scale, and manage their operations. Known for its speed, flexibility, and reliability, Shopify enhances the shopping experience both online and in-store. Trusted by millions of businesses across 175-plus countries, including brands like BarkBox, Vuori, BevMo, and Meta, Shopify continues to empower companies to succeed in an increasingly digital world.

With a market cap hovering around $139.3 billion, shares of this e-commerce platform provider have skyrocketed a remarkable 90.6% over the past year, easily towering over the broader S&P 500 Index ($SPX), which has posted gains of around 12.3% during the same stretch. Over the past five days alone, the stock is up 17%

The stock might not scream cheap at first glance, trading at 97 times forward earnings and 15.21 times sales, well above the sector medians of 22.33x and 3.02x. But put those numbers in context with SHOP’s own five-year averages of 323.36x and 25.27x, and the picture changes dramatically. By historical standards, the valuation looks far more attractive, suggesting the stock may be trading at a relative discount.

A Closer Look at Shopify’s Q1 Performance 

Shopify delivered mixed results for the first quarter of fiscal 2025 on May 8, but continued to showcase strong revenue momentum. The company reported a 27% year-over-year increase in revenue, reaching $2.4 billion, slightly ahead of Wall Street estimates. This marks Shopify’s eighth straight quarter of revenue growth, driven by solid performance across its core business segments. 

Subscription solutions brought in $620 million, up 21.3% from the prior year, while merchant solutions saw even stronger growth, rising 29% annually to $1.7 billion. Despite reporting a wider net loss of $682 million, up from $273 million a year earlier, Shopify continued to demonstrate strength in key operational metrics. The company posted a free cash flow margin of 15%, marking its seventh straight quarter of double-digit free cash flow, a sign of ongoing financial discipline. 

Meanwhile, gross merchandise volume (GMV) reached $74.8 billion in the first quarter, reflecting a robust 22.8% year-over-year increase. This also marked the seventh consecutive quarter of GMV growth above 20%, highlighting the platform’s sustained traction with merchants and consumers alike.

While reflecting on the company’s Q1 performance, management emphasized that the company is achieving both growth and profitability at scale, and merchants thrive on its platform regardless of market conditions. They that Shopify was built for challenging times, managing operational complexity so merchants can stay focused on their customers. With a rapid product rollout pace, Shopify continues to give its users a competitive edge.

Looking ahead to the second quarter of fiscal 2025, Shopify’s revenue is expected to grow in the mid-20% range year over year. Gross profit is projected to rise at a high-teens pace, while operating expenses are anticipated to represent 39% to 40% of revenue. The management also anticipates maintaining a mid-teens free cash flow margin, consistent with the strong performance seen in the first quarter.

What Do Analysts Expect for Shopify Stock?

As the company gears up for its Nasdaq-100 debut on May 19, Wall Street appears to be optimistic about SHOP stock, with a consensus “Moderate Buy” rating overall. Of the 45 analysts offering recommendations, 28 are giving it a solid “Strong Buy,” two suggest a “Moderate Buy,” 14 advise “Hold,” and the remaining one advocates a “Strong Sell.”

The average analyst price target of $117.37 indicates 5% potential upside from the current price levels. The Street-high price target of $175 suggests that SHOP could rally as much as 58% from here.