Shopify’s stock soared by 25% on Tuesday, following a strong earnings report and an optimistic holiday outlook, propelling Canada’s stock market to new heights.
The e-commerce giant, which holds the largest weight on Canada’s benchmark index, was the driving force behind the rally. Shopify’s gains pushed the S&P/TSX Composite Index up by as much as 1%, reaching an all-time high of nearly 25,025, surpassing the 25,000 mark for the first time in its history.
The company, which provides software for online storefronts, posted earnings per share of $0.35, significantly beating analysts’ expectations of $0.26, according to LSEG estimates. Revenue also exceeded forecasts, coming in at $2.16 billion, surpassing the expected $2.12 billion. Shopify’s upbeat performance, coupled with strong guidance for the holiday season, has sparked confidence among investors.
Looking ahead, Shopify projects mid-to-high twenties percentage growth in revenue for the current quarter, ahead of the 23% forecast by analysts at FactSet. This forward-looking optimism suggests strong consumer spending during the upcoming holiday season, which is driving investor confidence.
Shopify’s president, Harley Finkelstein, emphasized the company’s growing market share, highlighting the influx of major retailers such as Reebok, Hanes, and Vera Bradley to the platform. “Shopify is becoming the go-to platform of choice for not just entrepreneurs but for all of commerce,” Finkelstein said during an investor call. “We are well positioned for extensive growth across different merchant segments, sizes, geographies, channels, and products.”
In addition to its retail expansion, Shopify is also advancing in technology, launching AI-powered tools and an AI assistant for merchants to enhance their online businesses.
Analysts at Citi remain bullish on the stock, citing Shopify’s vast market potential, favorable industry trends, and its continued growth at scale.
The company’s stellar earnings performance is part of a broader momentum for Shopify, which has seen its stock climb over 43% this year. This surge is contributing to the strong performance of Canada’s stock market, which has risen by more than 19% in 2024, further buoyed by Shopify’s impressive results.
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