10 Stocks on Jim Cramer’s Radar

3. Shopify Inc. (NYSE:SHOP)

Cramer justified Shopify Inc.’s (NYSE:SHOP) increased spending by mentioning that it has to spend more to be able to handle its growing business.

“Now we hear from e-commerce facilitator Shopify and I gotta tell you, this last quarter had, what many people thought, was too much spending. I say when you have a flood of business, you have to spend to be able to handle it. I think we’ll see the fruits of Shopify’s spending this quarter.”

Shopify (NYSE:SHOP) provides a platform that enables merchants to manage and sell products across various channels, offering tools for inventory, payments, analytics, and financing. It released its third-quarter financial results on November 12, showing a solid performance that exceeded Wall Street’s expectations. For the period, the company reported a net income of $344 million on total sales of $2.16 billion. This represents a 26.3% increase in revenue year-over-year, with net income more than doubling.

Subscription Solutions revenue grew to $610 million, up from $486 million in Q3 of 2023, reflecting the expansion of the merchant base. Merchant Solutions’ revenue grew to $1.55 billion in Q3, compared to $1.23 billion in the previous year. The growth in Merchant Solutions was driven by the improvement of payment solutions and the continued integration of merchant services.

In the quarter, Shopify’s (NYSE:SHOP) Gross Merchandise Volume (GMV), which measures the total spending across stores using the e-commerce platform, increased by 24% year-over-year, reaching $69.72 billion.