With its e-commerce and cloud computing business spanning worldwide, Amazon (NASDAQ: AMZN) is one stock that every investor targets. Additionally, with its increasing hold in the digital advertising market, this stock has significant growth prospects in the long run.
So, should investors join the bandwagon?
Well, before buying Amazon, there is one growth stock that they must check out. It is none other than Canada’s very own Shopify (TSX: SHOP).
Apart from its home country, this e-commerce platform operator focuses on the U.S., Latin America, Middle East, Europe, Africa and the Asia Pacific markets. Shopify enables merchants to display and market their goods via several online and offline channels while providing payment, shipping and fulfillment solutions.
Here are some reasons why Shopify can be an excellent growth stock.
Chatbots for merchants and loads of other AI tools
Shopify is increasingly implementing AI tools to improve the experience for its merchants. For instance, the company has recently introduced an app called Sidekick. It can help sellers understand why their sales have slowed down and enable them to do several things like change their store design, launch seasonal sales, etc.
Furthermore, the platform has introduced a wide array of artificial intelligence (AI) tools in Shopify Magic, which can help merchants write product descriptions, headings for their online stores, email subject headlines, and more.
The greater the value Shopify can provide to its core clients (business owners), the stickier its platform becomes. These sorts of value-added pieces are ultra-important to understanding why Shopify remains a great long-term pick.
Acquisition of Deliverr for seamless merchant fulfillment
As of early July, Shopify officially completed its acquisition of Deliverr. This deal will help the Canadian e-commerce giant to seamlessly manage its merchant inventory from “port to porch.” It includes handling shipments right from arrival at domestic ports through the warehouse network, sales channels, and, ultimately, to the customer’s doorstep.
Shopify also plans to roll out Shop Promise, a feature that will allow merchants to avail reliable next-day and two-day deliveries all across the United States. Furthermore, sellers will get the benefit of multichannel inventory management, along with maintaining a balance between their inventory supply and customer demand.
Strong financial performance in Q1 2023
These added features all sound great. But if Shopify isn’t bringing home the bacon for investors, it all doesn’t matter.
The good news for investors is that Shopify has been posting strong performance of late. In the company’s first quarter, gross merchandise volume grew 15% on a year-over-year basis to US$49.6 billion. Its total revenue appreciated to US$1.5 billion, showing 25% growth from the first quarter of 2022 and a 27% increase on a constant currency basis. Additionally, its subscription solutions revenue and monthly recurring revenue appreciated by 11% and 10%, reaching US$382 million and US$116 million, respectively.
Bottom line
All these factors adequately showcase Shopify’s tremendous growth potential in the long run. Thus, investors who are thinking of investing in a stock like Amazon should consider purchasing Shopify first.
