Arrowstreet Capital Stock Portfolio: Top 10 Stocks to Buy

6. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders as of Q4: 64

Arrowstreet Capital’s Equity Stake: $1.75 Billion 

Shopify Inc. (NYSE:SHOP), a multinational e-commerce company, reported impressive revenue growth for the fourth quarter, surpassing expectations, though it fell short on earnings. The company posted adjusted earnings per share (EPS) of $0.39, missing the projected $0.43. However, revenue came in stronger than anticipated at $2.81 billion, exceeding the forecasted $2.73 billion. This represented a significant 31% increase from the $2.14 billion recorded in the same quarter of the previous year, demonstrating Shopify’s continued expansion and the increasing activity of its merchants. The company’s solid revenue performance highlights its ability to attract and retain businesses on its platform, even in a competitive e-commerce landscape.

Despite the earnings miss, Shopify Inc. (NYSE:SHOP) remains confident about its long-term growth prospects. The company expects the momentum seen in Q4 to extend into the first quarter, although it acknowledged that Q1 is historically its weakest in terms of gross merchandise volume. This positive outlook reflects Shopify’s strengthening ecosystem and the increasing adoption of its commerce solutions. The earnings report also comes at a time of broader shifts in the e-commerce sector, following former President Donald Trump’s recent tariffs on major trading partners and his decision to end the de minimis trade loophole, a policy often leveraged by Chinese online retailers. During an investor call, Shopify President Harley Finkelstein underscored the importance of the de minimis exemption for small businesses, emphasizing how it helps lower shipping costs and enables merchants to remain competitive. He also called for further reforms to support global commerce while ensuring fair trade practices.

As of Q4 2024, Arrowstreet Capital significantly boosted its holdings in Shopify Inc. (NYSE:SHOP), increasing its stake by 80% to over 16 million shares, up from 9 million shares in Q3. This move elevated the fund’s total investment in the company to nearly $1.8 billion. The strong hedge fund interest underscores growing confidence in Shopify’s long-term potential, making it a top stock to buy.