Shopify stock is up over 400% since 2022, yet the company only controls a fraction of the e-commerce market.
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Growth stocks make it fairly easy for anyone to build wealth in the stock market. Focusing on the companies that are innovating and disrupting large industries can help you find the right stocks that deliver explosive gains.
Here are two growth stocks that have already delivered significant gains for investors with room to run over the long term.
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Shopify (NASDAQ: SHOP) has truly been a monster stock. Investors who bought shares shortly after its initial public offering in 2015 would be up over 4,000% today, and it’s up over 400% since the market bottomed out in 2022.
These returns ultimately reflect the value Shopify offers business owners. For a relatively low subscription cost, merchants can set up an online store, accept payments, and have access to artificial intelligence (AI) tools that automate tasks.
Shopify has ample room to grow. The total value of all transactions completed with a Shopify merchant was $88 billion last quarter, or an annual run rate of $352 billion. Even though Shopify continues to grow its business at high double-digit rates, its annual GMV is still a small fraction of the $6 trillion global e-commerce market.
There are two important facts that make the stock a good investment.
Shopify is leveraging the power of AI to fuel product development and drive more revenue growth without increasing costs. It has benefited from this by growing its free cash flow by over 850% over the last three years while lowering its headcount.
Shopify’s merchants are growing faster than the broader e-commerce market. This reflects a strong competitive moat. Shopify makes most of its revenue from payments and other merchant solutions, which means it’s only as successful as the businesses that use it. With merchants in its…
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