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Unveiling the Rising Star: Shopify as the Next Trillion-Dollar Powerhouse

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Unveiling the Rising Star: Shopify as the Next Trillion-Dollar Powerhouse

Investing in the “Magnificent Seven” stocks like Apple, Amazon, and Microsoft has been a lucrative endeavor, with share prices skyrocketing over the years. However, as these giants near the trillion-dollar mark, the allure of exponential growth shifts to lesser-known stocks.

For investors seeking meteoric rise, attention turns to stocks embodying platform dynamics like Shopify (NYSE: SHOP). Platform businesses, characterized by allowing interactions between different parties, have been the bedrock of success for the Magnificent Seven.

The Genesis of Trillion-Dollar Companies

Amazon and Alphabet exemplify the platform model; they thrive not by owning all content but by providing an ecosystem for others to flourish. Similarly, Tesla, Microsoft, and Meta benefit from platform economics, enabling them to ride the coattails of allied businesses and customers.

Embracing Shopify: The Paradigm Platform Stock

Shopify’s e-commerce platform caters to individual merchants, contrasting Amazon’s centralized approach. With a diverse clientele, from startups to industry titans like Nike, Shopify’s revenue growth and solid free-cash-flow projections showcase its maturity.

Shopify platform diagram

Image source: Shopify Q4 2023 Investor Presentation

Having seen a 2,900% surge since its IPO in 2015, Shopify’s trajectory portends matching the Magnificent Seven’s growth. With the e-commerce sector poised to hit $8 trillion by 2027, maintaining market share alone could propel Shopify’s market cap by $30 billion.

Despite its pricey 14 times sales valuation, Shopify remains a bargain compared to historical highs, presenting potential for further appreciation.

Shopify’s Path to a $1 Trillion Valuation

Though achieving the trillion-dollar milestone may take time, Shopify’s momentum mirrors Amazon’s ascent. Strengthened by a feedback loop of users and merchants, Shopify aims to dominate the independent e-commerce realm, following the footsteps of Amazon in centralized e-commerce.

Amazon’s $1.8 trillion valuation sets a benchmark for Shopify’s future trajectory, hinting at the possibility of a monumental rise to join the elite club of trillion-dollar entities.

Where to invest $1,000 right now?

Discovering the next big player early can yield significant returns. Shopify’s inclusion in the elite list by Motley Fool Stock Advisor, known for beating the market consistently, illustrates the stock’s promise. Don’t overlook the potential of this rising star and other hidden gems.

Explore the top 10 stocks for unmatched growth potential.

*Stock Advisor returns as of February 26, 2024

Notable figures such as John Mackey, Suzanne Frey, and Randi Zuckerberg have affiliations with companies discussed. The Motley Fool holds positions in various stocks, recommending strategic options. Full disclosure policies are followed.

The author’s expressions are independent and may not align with Nasdaq, Inc.’s views.