To The Moon

$NASDAQ(.IXIC)$

Shopify’s( $Shopify(SHOP)$ ) making waves, officially joining the Nasdaq 100 and Nasdaq-100 Equal Weighted Index on May 19, 2025, replacing MongoDB. The e-commerce giant’s stock surged 12% on the news, riding the momentum of a strong Q1 earnings report. But after this double-digit pop, is there still room to run, or is it time to cash out? Let’s break down Shopify’s recent performance, the impact of its Nasdaq 100 inclusion, and whether you should hold tight or take profits.

Shopify’s Nasdaq 100 Entry: Why It Matters

Shopify’s addition to the Nasdaq 100 is a big deal. The index tracks the 100 largest non-financial companies on the Nasdaq, exposing Shopify to a flood of institutional money. Funds like the Invesco QQQ Trust, which mirror the Nasdaq 100, will need to buy SHOP shares—potentially injecting billions in demand. Historically, new Nasdaq 100 entrants have seen an average 16% gain in the 12 months following inclusion, suggesting Shopify’s 12% jump might just be the appetizer.

This isn’t Shopify’s first rodeo with market buzz. The stock climbed 7.8% in pre-market trading after the announcement, and posts on X show traders hyped for more upside, with some calling it a “momentum rocket.” But others caution that the initial pop could fade, as half of new entrants lose gains within 25 days post-addition.

Q1 Earnings: A Growth Machine in High Gear

Shopify’s Q1 2025 earnings, released on May 8, paint a picture of a company firing on all cylinders. Revenue soared 26.9% year-over-year to $2.36 billion, beating estimates by $30 million. Gross merchandise volume (GMV) hit $74.75 billion, up 22.8%, with international GMV spiking 31% and B2B GMV doubling at 109%. Shopify Payments penetration reached 64%, processing $22 billion via Shop Pay—a 57% jump.

Profitability metrics are equally impressive. Adjusted operating income rose 63.7% to $329 million, and free cash flow climbed 56.5% to $363 million, with a 15% margin. Operating expenses as a percentage of revenue dropped to 40.9%, showing Shopify’s getting leaner while scaling fast. The company’s global reach—spanning 175 countries—and a 12% U.S. e-commerce market share cement its dominance.

But there’s a catch: Shopify reported a GAAP net loss of $0.53 per share, wider than last year’s $0.21, due to equity investment accounting. Non-GAAP EPS of $0.25 missed consensus by a hair, which explains a 2% dip post-earnings before the Nasdaq 100 news revived the stock.

After the 12% Jump: Still Room to Run?

Shopify’s stock closed at $91.77 before the 12% surge, putting it around $102.78 now. Analysts’ average one-year target is $132.95, with a high of $175, suggesting up to 70% upside. Even the low target of $87.64 is below current levels, but Wall Street’s “Outperform” rating (2.2/5 score) leans bullish. The stock’s YTD gain of 56% reflects strong momentum, but its forward P/E of 80 and P/S of 14 scream premium pricing.

The Bull Case

• Nasdaq 100 Tailwind: Historical data points to a 16% average post-inclusion gain—Shopify’s 12% move might have more gas in the tank.

• Growth Engine: Q1’s 26.9% revenue growth and international expansion signal Shopify’s nowhere near slowing down. E-commerce’s 19% CAGR through 2030 (per Grand View Research) is a rising tide.

• Efficiency Gains: Free cash flow margins at 15% and shrinking operating costs show Shopify’s maturing into a profit machine.

The Bear Case

• Valuation Risk: A P/E of 80 leaves little room for error. Any growth hiccup could spark a pullback.

• Post-Inclusion Fade: Half of Nasdaq 100 newcomers see gains erode within 25 days—profit-taking could hit hard.

• Macro Headwinds: Tariffs and trade tensions could dent Shopify’s global ambitions, especially after Canada’s trade war fears.

Hold or Take Profits?

Shopify’s fundamentals are rock-solid, but the 12% pop and lofty valuation make this a tough call. If you’re in for the long haul, holding makes sense—Nasdaq 100 inclusion and e-commerce tailwinds could push SHOP toward $130-$140 by year-end. But if you’re risk-averse, taking profits now and waiting for a dip near $90-$95 could be smarter. The stock’s 66% run since January already prices in a lot of growth, and a short-term pullback wouldn’t be surprising.

My Play: I’m holding 70% of my position for the long-term upside but trimming 30% to lock in gains. If it dips below $100, I’ll reload.

Shopify’s Stock Surge Visualized

The chart shows Shopify’s steady climb, with the 12% jump stealing the show. Can it keep climbing?

The Big Picture: A Star With Risks

Shopify’s Nasdaq 100 inclusion is a badge of honor, and its Q1 earnings prove it’s a growth juggernaut. There’s still upside potential—possibly to $130 or more—but the 12% surge and high valuation call for caution. Whether you hold or take profits depends on your risk appetite and time horizon. One thing’s clear: Shopify’s e-commerce empire isn’t slowing down anytime soon.

What’s your move—holding for the ride or cashing out? Drop your thoughts below!

Disclaimer: Not financial advice. Markets can be brutal—invest wisely.

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