Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Shopify Is Seizing an $80 Billion Pot of Gold

Stock-Markets / Investing 2020 Jul 28, 2020 - 01:40 PM GMT

By: Stephen_McBride

Stock-Markets

I’m about to show you the most important table in all of investing. Please look at it closely.

Below, you’ll find the world’s 10 largest publicly traded companies in 2000, 2010, and 2020.


You probably recognize most of these stocks. The 2020 column reads like a “who’s who” of the most popular US stocks today. But you’ll notice a strange pattern when you look across all three columns.

The list completely changes every decade. In other words, most of the world’s dominant companies falter and fall out of the top 10. Only Microsoft has maintained its position since 2000.

And usually when a stock drops off the list, it does not decline gracefully. Investors who owned it get crushed. For example, from 2001–2018, General Electric (GE) stock plunged 79%, Cisco (CSCO) collapsed 89%, and Intel (INTC) dropped 56%.

Now I’ve practically memorized all the “top 10” lists going back to the ‘60s. And what they indicate might shock you: Owning the largest companies in the world is usually a money-losing strategy.

Instead, You Want to Own the “Rising Stars”

In other words, you generally don’t want to own the stocks “at the top of the mountain” today. Instead, hunt for the stocks that are climbing the mountain. The ones that will be on top in 5–10 years.

In my experience, most investors do the opposite. They gravitate toward companies that are already huge. They think huge = safe. They assume today’s powerful companies like Apple and Facebook will be powerful forever.

That’s not usually how it turns out. We see it play out over and over again in the stock market: Smaller, hungrier companies rise up and eat the lunch of larger, older companies. Today, I’ll predict one new rising star that could someday claim a spot in the top 10.

Have you heard of Shopify (SHOP)?

Shopify builds online stores for mom-and-pop shops. From creating the website, to shipping orders, to processing payments, Shopify is a “one-stop shop” for anyone wanting to sell online.

Americans are spending more money online than ever before. In 2009, internet shopping was a $100 billion business. Last year consumers spent over $600 billion online. The thing is, mom-and-pop shops only grab a tiny slice of the pie.

There are 30 million small businesses in the US. They make up 99.9% of all companies in America. And according to IRS data, firms with less than $100,000 in annual sales raked in a combined $2.2 trillion last year. Yet almost none of this happens online.

A recent CNBC poll found almost half of small businesses don’t even have a website. And according to Gallup, 2/3 of mom-and-pop stores that sell online generate less than 10% of their sales on the internet.

The Coronavirus Sparked a Wave of Mom-and-Pop Stores to Shift Online.

It forced tens of millions of businesses to close their doors for months. And the only way to keep cash coming in was to sell online. Businesses that didn’t even have a rudimentary website were suddenly rushing to set up fully functional internet stores.

Web hosting company GoDaddy found 20% of small businesses sold an item online for the first time ever during lockdown. Until recently, creating an online store during a pandemic would have been impossible. But as I showed you, Shopify came to the rescue for millions of mom-and-pop shops.

New stores created on Shopify’s platform surged 62% during the lockdowns. And the most shocking stat of all: Stores with a presence on Shopify recouped 94% of lost in-person sales with online orders! Internet shopping has grown more in the past 12 weeks than it did during the last decade, as you can see here:

The hundreds of thousands of small businesses that shifted online are never going back. For as little as $29 a month, Shopify manages every part of their online stores, including deliveries.

To put it mildly, that’s a real bargain, considering Shopify was the only thing that saved many mom-and-pops from going belly up during lockdowns.

In fact, being online also helps them reach thousands of new customers. Internet shopping has no boundaries. With a Shopify website, the neighborhood craft store can now sell to folks across the country.

Shopify Is Seizing an $80 Billion Pot of Gold

Remember, Shopify is like an invisible partner that allows businesses to build their own online brands. It handles the “dirty work” of online selling, like payments, shipping, and marketing without taking any of the credit. In fact, last year almost 300 million people bought something on Shopify without even knowing it existed.

This is why it’s fast becoming the “go-to” solution for anyone wanting to sell anything online. Shopify now powers over one million merchants from 175 countries. And these businesses sold $60 billion worth of goods through its platform last year.

Yet, this is only the tip of the iceberg. Shopify estimates there are 47 million small businesses that it doesn’t serve yet. It collects $1,650/year from each merchant, on average. That means Shopify could potentially rake in $80 billion/year.

Sales hit $1.5 billion last year. Shopify’s revenues could soar 10X and it would still have captured just 20% of its target market. And that’s not even counting the larger brands Shopify is serving.

It already hosts websites for giants like Unilever, Red Bull, Heinz, Budweiser, Pepsi, and Nestle. And these big firms typically pay $2,000 per month for Shopify’s premium offering, Shopify Plus.

Shopify’s stock has been on a tear over the past two years, handing investors 745% gains. That’s a big gain in a short period, so I wouldn’t go “all in” on the stock here.

But remember this: Online business is still only in its first inning. Shopify is the key to unlocking business on the internet for millions of mom-and-pops. It’s one of the most important internet companies investors aren’t paying attention to. And I expect by 2030, we might be talking about Shopify like we talk about Amazon and Apple today.

The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money"
Get my latest report where I reveal my three favorite stocks that will hand you 100% gains as they disrupt whole industries. Get your free copy here.

By Stephen McBride

http://www.riskhedge.com

© 2020 Copyright Stephen McBride - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in