We recently compiled a list of the 20 Best Fintech Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Shopify Inc. (NYSE:SHOP) stands against the other fintech stocks.
Tech stocks have faced challenges lately, and fintech companies have been hit particularly hard. On March 10, CNBC reported that the Nasdaq experienced its biggest drop since 2022 with financial technology companies being some of the biggest losers. These companies included stock trading apps and cryptocurrency exchanges, which suffered due to a drop in Bitcoin prices. Bitcoin declined by nearly 5%, continuing a downward trend. The leading cryptocurrency has fallen 19% over the past month.
READ ALSO: 10 Cheap Technology Stocks to Buy According to Hedge Funds and 10 Worst Performing Crypto Stocks to Buy Now.
Beyond crypto, other fintech sectors like online lenders and payments companies also suffered. These companies also declined more than the broader market.
Fintech analysts point to declining consumer confidence as a potential challenge, especially for companies that rely on consumer spending. In February, the Conference Board’s consumer confidence index fell to 98.3, falling by nearly 7%. This decline marked the largest monthly drop since August 2021. According to CNBC, analysts noted that while fintech companies had performed relatively well since the election, sentiment has recently turned sour due to declining consumer confidence and signs of slowing discretionary spending.
The current fintech sell-off came after a strong rally in the fourth quarter of 2024, which was driven by expectations of Fed rate cuts and hopes for a more favorable regulatory environment under the Trump administration.
Despite a challenging time, fintech companies continue to invest in new technologies. This is leading to significant innovation and disruption in financial services. Additionally, recent declines could present a buying opportunity as certain fintech companies are setting themselves to perform well in the future.
Methodology
To compile our list of the 20 best fintech stocks to buy according to billionaires, we looked for the biggest fintech companies. We reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of the best fintech stocks. Next, we focused on the top 20 fintech stocks most favored by billionaires. Data for the number of billionaire investors for each stock was taken from Insider Monkey’s Q4 2024 database. Finally, the 20 best fintech stocks to buy were ranked in ascending order based on the number of billionaires holding stakes in them as of Q4 2024.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A business person using a mobile point of sale device outside of a retail store.
Shopify Inc. (NYSE:SHOP)
Number of Billionaire Investors: 16
Number of Hedge Fund Holders: 64
Shopify Inc. (NYSE:SHOP) is a Canadian multinational commerce company that provides a platform for e-commerce. Shopify is the company’s e-commerce platform for online stores and retail POS systems. The company offers products and services that help start, scale, market, and run a retail business of any size. Shopify Inc. (NYSE:SHOP) offers tools for creating online stores, managing inventory, and processing payments to power businesses in over 175 countries. The company offers a suite of financial tools, including Shopify Balance, Shopify Credit, Shopify Capital, Shopify Bill Pay, and Shopify Tax, designed to help merchants manage cash flow, access funds faster, and simplify financial tasks. SHOP ranks among the best fintech stocks to buy.
On February 12, Piper Sandler analyst Clarke Jeffries raised the price target for Shopify Inc. (NYSE:SHOP) from $94 to $104 and maintained a “Neutral” rating. This adjustment reflects the company’s strong performance, particularly in international markets. In Q4 2024, Shopify Inc. (NYSE:SHOP) reported a 31% year-over-year revenue growth and a 26% increase in Gross Merchandise Volume (GMV). The company also achieved a post-pandemic high Free Cash Flow (FCF) margin of 22%. The analyst noted that Shopify Inc. (NYSE:SHOP) is successfully expanding its global presence and achieved international revenue growing over 30% for the second consecutive year. Half of the company’s customer base is now outside Canada and the US. The Europe, Middle East, and Africa (EMEA) region stood out with 35% revenue growth. Despite these positive indicators, Jeffries noted that Shopify Inc. (NYSE:SHOP) is investing in key areas and plans to maintain its current FCF profitability level in the near term, which may limit stock movement.
Overall, SHOP ranks 6th on our list of the best fintech stocks to buy according to billionaires. While we acknowledge the potential of SHOP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SHOP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
