Shopify’s (TSX:SHOP) Huge Partnership With Google Sent the Stock Soaring 7%

Shopify stock could present more upside to investors with its massive partnership with Google, sending its share price soaring.

| More on:
calculate and analyze stock

Image source: Getty Images

The massive tech sector stock sell-off intensified over the past few weeks, resulting in losses across the board for Canadian tech companies trading on the TSX. Even the growth stock darling, Shopify (TSX:SHOP)(NYSE:SHOP) lost the momentum it gained over the last few years with its remarkable meteoric growth.

The tech sell-off was understandable at first. Many companies in the industry received substantial tailwind from the pandemic, driving revenue growth and increasing valuations. However, the pandemic tailwinds began fading away as the global situation began normalizing this year.

After a year that saw many tech stocks soar to record highs, it was hardly surprising to see them come down. Despite the industry-wide sell-off, Shopify remained resilient in the face of adversity.

Today I will discuss Shopify’s resilience on the stock market and how a deal with Alphabet’s Google has revitalized its growth.

Shopify’s resilience

Shopify had an incredible performance in 2020 but began declining at the start of 2021. The stock hit the $1,400 per share region and stabilized within that range. Unlike many other tech stocks, Shopify did not get any cheaper from those levels. Even the most recent selloff frenzy in tech stocks did not sway Shopify.

Many investors consider Shopify to be an excellent growth stock and were unwilling to sell the stock for any cheaper than in the $1,400 range. It is such a high-quality business that it will be impossible for the stock to get undervalued.

Shopify’s Google deal

A recent developer conference saw a flurry of new growth ideas being thrown around by Google. Amazon is a leader in the e-commerce space. In order to push the competition in this sector, Google announced a partnership with Shopify.

The Shopify stock reacted immediately to the good news. As two of the most significant tech businesses worldwide, the partnership added more value to Google and Shopify. Shopify stock is trading for $1,464 per share at writing and is up 7.23% from its valuation before the deal was announced.

Over the years, the spectacular growth of Shopify stock was driven by the sustained demand for its e-commerce platform, solid growth in its top line, and its growing market share. The recent deal with Google will see Shopify’s 1.7 million merchants integrate with the search engine giant’s offerings. With just a few clicks, the retailers can appear more prominently on Google.

Google eliminated fees for retailers on its shopping service last year to lure merchants from Amazon. Its partnership with Shopify will allow both tech giants to see business improve.

Foolish takeaway

Shopify has become the best Canadian growth stock of all time, offering its investors stellar returns. Its partnership with Google adds the promise of exceptional growth potential in the coming years.

The stock may not get any cheaper, and the barrier of entry is high. However, it could be suitable for you to pick up Shopify stock before the growth premiums return and the stock rallies.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify and recommends the following options: short January 2023 $1160 calls on Shopify and long January 2023 $1140 calls on Shopify.

More on Investing

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

money goes up and down in balance
Investing

Unveiled: 2 Must-Watch Stocks for Your TFSA Before 2025

Value-conscious TFSA investors should consider Bank of Nova Scotia (TSX:BNS) and another great dividend pick.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »

how to save money
Dividend Stocks

Got $1,000? The 3 Best Canadian Stocks to Buy Right Now

If you're looking for some cash flow from your $1,000 investment, these are the ideal investments to make.

Read more »

Data center servers IT workers
Tech Stocks

Better Buy: Shopify Stock or Constellation Software?

Let's dive into whether Shopify (TSX:SHOP) or Constellation Software (TSX:CSU) are the better options for growth investors in this current…

Read more »

Electricity transmission towers with orange glowing wires against night sky
Investing

Fortis Rose 11% in 90 Days, and it’s Still a Good Stock to Buy Now

Here's why Fortis (TSX:FTS) is among the top dividend stocks I think long-term investors want to own in this current…

Read more »