Long-term technology holdings are among the key focal points of many investors right now. Indeed, ensuring investors have enough growth in their portfolios to at least match the market is important. In this context, investors in Shopify (TSX:SHOP)(NYSE:SHOP) stock have done well of late.
Currently, Shopify is trading near its all-time high. And the company is approaching the $2,000-per-share level rapidly. Indeed, there’s a good probability Shopify stock will breach this mark in short order.
However, before we get ahead of ourselves, let’s take a look at some of the factors investors should consider. Let’s take a look at why Shopify has been soaring, and what might be in store for this growth gem from here.
Investors in Shopify stock also have a stake in Stripe
One of the things I like most about Shopify is the company’s ability to leverage its partnerships over time. Shopify’s management team has done a fantastic job of creating a fully-integrated e-commerce platform. A lot of this has to do with various deals the company has made over the years.
One recent deal which caught my eye was Shopify’s recent investment in Stripe, a private online payment processing platform. This massive $350 million investment gives Shopify a stake in Stripe but also allows the company to further leverage Stripe’s services for its platform. It’s a win-win scenario for both parties.
In fact, I think Shopify shareholders are the biggest winners from this deal. Shopify’s investment in Stripe, from a purely financial perspective, carries a lot of upside. Factor in the integration potential of this deal, and investors can see how big of a deal this partnership could be from a long-term perspective.
Stripe and Shopify have been close partners ever since Shopify Pay was launched. In fact, the payment platform is responsible for more than half of Shopify’s revenue.
However, this deep-rooted partnership just got a lot stronger. And there are tonnes of untapped synergies that could be unleashed as a result of the deal.
Over the years, Shopify has emerged as one of the most active corporate venture capital investors in Canada. It has managed to leave behind Swyft Technologies, a leading software provider based in Toronto. Shopify has also managed to gain speed over Miami’s Pipe Technologies and Vancouver’s Bench Accounting, making it a leading name in this space.
Shopify is a company with a sky-high valuation. But it’s also a company with a sky-high growth rate and is only scraping the surface in terms of its verticals right now.
There are many reasons why long-term growth investors are bullish on Shopify. However, the company’s recent results speak for themselves. Those who believe this growth is sustainable ought to give Shopify a look right now.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Chris MacDonald has no position in any stocks mentioned in this article. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.