2024 has been a solid year for the TSX. The index has risen by about 23%, and the bulk of that growth has happened in the last six months (16%). But like any other bull market and bear market surges, the impact has been different for all underlying sectors and industries. Some, like energy, have fallen over the same period, while tech has outpaced the market by a significant margin.
And it's a tech stock expected to keep surging as we enter 2025.
The e-commerce giant
Shopify (TSX:SHOP) is a Canadian e-commerce giant and one of the largest e-commerce platforms in the world. It has a sizable market share of the global market of e-commerce stores and in the U.S., it tops the charts with 30%, followed by Wix Stores. The platform has also inspired a massive ecosystem of applications and tools for merchants around the globe who use Shopify for their e-commerce needs.
The ecosystem has grown to about 13,000 applications. The platform caters to millions of merchants in 175 countries, and to date, about $1 trillion worth of transactions have taken place on Shopify platforms.
A significant dominance in the e-commerce niche has been Shopify's primary strength since its inception. This was one of the things that catapulted Shopify stock over 5,000% in around six-and-a-half years. Then, the stock slumped and struggled through a drawn-out correction phase and has only now started to break out of it.
Shopify stock in 2025
Shopify stock has grown by about 92% in the last six months. The trajectory hasn't been smooth, but the direction has remained chiefly upward. One major catalyst behind the recent surge is the strong integration of artificial intelligence (AI) into the platform. Shopify is leaning heavily towards AI, and now that it is producing results for a wide range of merchants, they are naturally attracted to the platform.
Another and perhaps stronger candidate that has triggered and is sustaining the growth momentum that may continue well into 2025 (apart from the holiday sales) is the platform's organic and financial growth.
Both revenue and gross profit have increased for three consecutive years, though the gap between the first quarter (Q1) and Q2 is far more significant than the gap between Q2 and Q3. However, a strong holiday season and significant merchant revenues might also lead to much healthier numbers for Shopify.
There is a strong probability that Shopify stock's current bullish momentum will carry into 2025 and may even surge after Q4 results are announced. Considering its most recent growth surge, this may be enough to double your capital in a relatively short amount of time, possibly even within the following year.
Foolish takeaway
While tech stocks are known for strong growth (in the right environment), Shopify is in a league of its own when it comes to capital-appreciation potential. The correction phase might have made investors wary, and the current valuation is another danger sign, but if there is even a modest possibility that Shopify might experience a growth phase similar to its early years, you should try to get in on the action.
