Shopify (TSX:SHOP) stock surged 4.1% on an upbeat Tuesday for the broader markets. Indeed, cooling tech plays got a big boost, thanks in part to some cooling in the U.S. labour market. Undoubtedly, bad news is good news for the broader markets, as central banks may not have the need to tighten as aggressively from here. Indeed, whenever we have a “bad news is good news” type of environment, things can get a tad confusing, especially for beginner investors.
For high-tech e-commerce companies, economic woes and a hit on consumer spending are not ideal. However, higher interest rates seem to be the greater poison when it comes to such high-multiple, high-growth tech stocks. At the time of writing, shares of Shopify are down 13.5% from 52-week highs. The stock has recovered a great deal of the ground lost during its 22% drop from peak to trough.
Shopify stock could be a top pick for September 2023
Whether Shopify can keep adding to its gains going into the September season remains to be seen. I think Shopify stock’s recent pullback may prove to be a golden buying opportunity for growth-savvy investors who are willing to ride the big ups and downs.
Analysts over at Wedbush Securities view Shopify stock favourably going into the second half of the year. Why? The firm believes Shopify can make good on upselling opportunities. With such a strong line-up of merchants, there’s no question that Shopify could have an opportunity to tout new must-have features to help firms save money and attract more shoppers.
Shopify: Getting out of logistics is a smart move
I think Shopify’s pivot away from logistics will prove brilliant in a few years. Though SHOP stock has already been rewarded by Mr. Market for previously announced strategic shifts, I still think Shopify has room to run as it continues to capture a massive total addressable market.
Shopify merchants clearly love the innovative technologies embedded in the platform. As technological breakthroughs such as spatial computing and artificial intelligence advance, look for Shopify to be one of the first firms to jump aboard the bandwagon as it seeks to bring its many e-commerce users to new realms.
Personally, Shopify stands out as one Canadian tech company that could benefit most from the rise of spatial computing (or the metaverse, if you prefer). Indeed, spatial computing could take many years (or more than a decade) to really become mainstream with users.
However, when digital shopping goes from desktop and mobile to headsets, I think Shopify will be ready for the shift. Merchants will probably be more than willing to enter the spatial world with the innovations offered by Shopify.
The Foolish bottom line
Sure, virtual storefronts aren’t likely to be a big earnings driver for Shopify anytime soon. That said, I think long-term investors who plan to hang onto shares for 10-15 years should be comfortable hanging onto their shares of Shopify.
I view it as one of the most future-proof tech companies out there. Whether it’s artificial intelligence or the metaverse that takes off, I think Shopify will not be left sleeping at the wheel once new tech kicks it into high gear. In that regard, Shopify stock looks too cheap after its August tumble.
