We recently compiled a list of the 10 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Shopify Inc. (NYSE:SHOP) stands against the other stocks on Jim Cramer’s radar.
Jim Cramer, the host of Mad Money, recently shared his outlook for Wall Street, focusing on earnings reports. On Friday, he highlighted how the S&P 500 surged toward 6,000 in almost a straight line, a remarkable rally driven by overwhelming buying and a lack of selling. Cramer noted the market’s performance, pointing out that the Dow rose by 260 points, the S&P gained 0.38%, and the Nasdaq advanced 0.09%, with all major indices closing at new record highs.
He described Friday as another impressive session, adding that it marked a historic moment. Cramer reiterated his point, stating:
“This is ladies and gentlemen, a historic move we are witnessing, fueled by an election where voters chose a candidate who is pro-growth, pro-higher stock prices, pro-lower interest rates, and pro-lower taxes… Trump is the most explicitly pro-stock market president in history.”
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Cramer went on to say that now that Trump has won, the benefits are clear across many sectors. He cited tech, oil, pharmaceuticals, consumer goods, and financials as prime examples of sectors seeing strong performance. He emphasized that these gains were driven by money managers who feared missing out on the market’s upward trajectory and were unwilling to sell, knowing they might not have enough stocks in their portfolios. Cramer also predicted that we would soon witness a surge in mergers and acquisitions.
“At the same time, we’re about to see a wave of takeovers as the antitrust regulators will stop trying to block every deal under the sun because a new broom is gonna sweep clean.”
Cramer stressed the importance of looking at the market on a sector-by-sector basis. He noted that the tech sector had taken a breather on Friday. In the coming days, he suggested that retailers might surge, followed by financials and then industrials. He described this cycle of sector rotations as part of an “incredibly bullish, virtuous circle” of market gains. While Cramer acknowledged that stocks had performed well under President Biden, he pointed out that Biden didn’t seem to place much importance on the stock market during his tenure.
“For him, it was an abstraction,” Cramer remarked, adding that this stance was changing with the current administration. In conclusion, Cramer made it clear that stocks were about to have a true champion in the White House once again.
“Stocks are about to have a champion in the White House again, even if you might think they aren’t worthy of a presidential supporter. I say get used to it, even though the buying’s started already, because we got a lot more room to run.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 8 and listed the stocks in the order that Cramer mentioned them.
Why are we interested in the stocks that hedge funds pile into? 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An enthusiastic customer completing a purchase and receiving an order confirmation via one of the companies online sales channels.
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.
Overall SHOP ranks 3rd on our list of the stocks on Jim Cramer’s radar. While we acknowledge the potential of SHOP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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.
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Disclosure: None. This article is originally published at Insider Monkey.