Cathie Wood’s Top 5 Buys in July

2. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 72

Shopify Inc. (NYSE:SHOP) is a Canadian e-commerce company. On July 26, Ark Fintech Innovation ETF purchased 238,088 shares of Shopify Inc. (NYSE:SHOP), ARK Innovation ETF bought 1.326 million shares and ARK Next Generation Internet ETF acquired 201,546 shares of the company.

On July 27, Jefferies analyst Samad Samana maintained a Buy rating on Shopify Inc. (NYSE:SHOP) and lowered the firm’s price target on the stock to $40 from $47.50 after the company’s GMV growth in Q2 dropped to 11% from 16% in Q1, primarily due to consumer spending shifting from online channels to in-store. While “bad news was expected, and more may be yet to come for GMV” in the second half, according to the analyst, Shopify Inc. (NYSE:SHOP) has continued to solidify its position as a platform for vendors to build on. The analyst slashed 2022 total revenue and GMV estimates by about 2% each and for 2023 has cut the GMV estimate by roughly 7% and revenue by 8%.

According to Insider Monkey’s data, 72 hedge funds were bullish on Shopify Inc. (NYSE:SHOP) at the end of March 2022, compared to 86 funds in the earlier quarter. Stephen Mandel’s Lone Pine Capital is a prominent stakeholder of the company, with more than 1 million shares worth $699 million. 

Here is what Rowan Street has to say about Shopify Inc. (NYSE:SHOP) in its Q2 2022 investor letter:

“Tobias Lutke, Shopify (NYSE:SHOP) Founder and CEO

When Tobias Lütke opened an online snowboarding store in 2004, he realized how painfully cumbersome e-commerce software was. So he decided to create Shopify – a platform that made it easy for anyone to open up an online store.

Tobi has built Shopify into one of the most popular e-commerce platforms in the world, with $175 billion in GMV (Gross Merchandise Value) and $4.6 billion in revenues in 2021. SHOP went public in 2015, when revenues were just lightly above $200 million, and the stock is up 1,233% since its IPO. Shopify stock peaked in November 2021 (traded at astronomical 47x sales), which coincided with peak enthusiasm for the tech-driven, “stay-home” stocks. Since then, the stock is down almost 80% and is currently trading at just 6x 2023E sales. We believe that Mr. Market is offering us an exceptional value, at current price levels, for an exceptional company led by a very talented, visionary founder/CEO.”