“One Trillion Reasons Why”
Welcome to Wednesday, futurists.
Today we’re diving into an analysis of Shopify’s earnings report which stunned an otherwise pessimistic marketplace. All signs point to a “flippening” of the vibecession.
But before we get there, we have some big news coming at the end of this week. Our newest VISIONS event is on the horizon. If you want to be the first to know when and where it will take place, join the Future Commerce Plus membership.
Everyone else, drag this email to your priority inbox so you don’t miss the early bird!
One Trillion Reasons Why
This week, Shopify beat earnings in a big way (understatement), and the market responded in earnest: $SHOP saw as much as a 20% gain in share price in intraday trading, bucking the otherwise dour tone in the market after Japanese stocks caused a panic and halted some exchanges on Monday morning.
As we reported in June, the eCom juggernaut crossed a milestone of $1 Trillion in Cumulative GMV, outpacing its rival Amazon to the threshold by two years:
Shopify's rapid ascent to $1 trillion in GMV in just 18 years underscores the accelerating pace of digital commerce and the effectiveness of its platform model; if not also highlighting the impact of rising inflation and a global marketplace. By contrast, Amazon's journey to $1 trillion took 24 years, which makes sense given the slower initial growth phase of the early Internet era and how diversified away from pure marketplace the business is.
The risk of the accelerative GMV storyline, however, is the Multiplayer Dynamics of meme stocks and overall market volatility at the moment.
Shopify could inadvertently become a new Tesla or Nvidia, occupying a space for meme stocks that a “Big Seven” retail-investor-tech-stock refugee might find worth a bet (as a 20% single-day bump might suggest).
Such a move could create more liquidity for the company in the short term, which could finance bigger moonshots, like founder Tobi Lutke’s decades-long fascination with Spatial Commerce.
Consider how Shopify’s price/earnings ratio now stacks up to volatile stocks like Nvidia and Tesla:
Whatever happens, Shopify expects the growth to continue as more enterprise brands abandon legacy platforms in favor of a lower complexity, more templated solution. In today’s earnings call they forecast a Q3 revenue growth of low-to-mid-twenties percentage rate on a Y/Y basis.
Here's what's next for Shopify, if tech history is any guide:
- Mergers and Acquisitions: Shopify has historically made smaller, more surgical M&A moves. A larger target could be in the cards as market conditions drive further consolidation.
- The AI Arms Race: Expect a shopping spree for machine learning startups. Tomorrow's website might be less ‘monocultural’ and far more multi-modal. Why are websites all the same? Because Google demands that they be, which might need to change as Google enters an uncertain decade.
- Brick-and-Mortar 2.0: Physical stores aren't dead; they're data goldmines. Watch for Shopify to bridge the digital-physical divide with AR-powered pop-ups.
- Fintech Fever: Shopify Capital has already loaned over $5B to small businesses; liquidity can
- Talent Tug-of-War: Silicon Valley's loss is Ottawa's gain. A Canadian brain gain (vs a brain drain) may be in store as Shopify flexes its newfound financial muscles.
- Global Gambit: Emerging markets are calling. Shopify could tailor its platform for the next billion entrepreneurs, from Lagos to Jakarta.
- Moonshots: New tech, new infrastructure. The next platform revolution could change the nature of commerce, especially commerce on the web.
Whatever happens, futurists, we’ll be here to remind you that we predicted it.
— Phillip
Note: This is not financial advice. Portions of market analysis, research and data aggregation was performed with Perplexity Pro, an AI product. Perplexity is not an advertising partner of Future Commerce and does not endorse this content.
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