Even though it’s currently a fraction of its former self, Shopify has set the benchmark for growth for a tech giant in Canada. It dislodged the largest bank in Canada from the position of the most valuable company in Canada, which is something it has maintained for years.
While there are stocks that might be able to push past Shopify by the end of this decade if they experience explosive growth, few stocks have a realistic chance of doing that.
They are blue-chip stocks with a market capitalization that is already modestly close to Shopify and a performance history that endorses their potential to reach the current Shopify valuation.
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An information conglomerate
Thomson Reuters (TSX:TRI) has been in the information business since its inception, one way or another. One of the companies that made up this original conglomerate transmitted stock prices from different exchanges via telegraph in the 1850s. The other was a newspaper.
As the company entered the modern era, the business model changed. It started offering a range of professional services and tools to a handful of industries. However, information has remained at the company’s core.
This is also evident in the company’s current direction: artificial intelligence (AI). The company has integrated AI into many of its tools and services and offerings. It’s also making substantial AI-related investments. The fact that it’s already a trusted name in information makes it even more promising as an “AI-oriented” stock (even though it’s not a pure-breed AI stock).
The current direction the company is going in can help it grow at a far more accelerated pace than its current one. However, even if the company sticks to its current growth pace and grows just as much in the next five years (148%) as it did in the last five years, it would be worth more than Shopify.
A tech stock
If there is one tech stock that is ideally positioned to become more valuable then Shopify compared to all others (especially in a relatively short amount of time), it’s Constellation Software (TSX:CSU). There are two reasons.
One is that it already has a sizable market value of $90 billion. And secondly, its growth rate has been far more consistent and explosive than almost all other stocks in the tech sector.
Even if it manages to replicate its five-year growth of 233% in the next five years, it will be ahead of Shopify’s current market value if its growth gets accelerated and closer to its long-term growth pace (1,200% in the last 10 years).
Constellation has a fair chance of outpacing Shopify’s market value, even if the e-commerce stock keeps growing at a decent pace.
Foolish takeaway
These two stocks have a reasonable chance of growing past Shopify stock’s current valuation or even its increased valuation, assuming it maintains its modest growth pace. However, if Shopify starts increasing at a pace that it did in the early days, the gap would be too wide for these or most other stocks to cover.
