Shopify Inc. (NASDAQ:SHOP) is among the stocks in focus as Jim Cramer reviewed the S&P 500’s top performers and the Nasdaq 100’s biggest laggards for the first quarter. Cramer highlighted why the stock declined despite “tremendous growth and impressive profitability.” He commented:
Finally, there’s Shopify, down 26% in the first quarter. This one’s like AppLovin. It’s got a great business with tremendous growth and impressive profitability, but its stock just got too high. Even here, it sells for 64 times this year’s earnings estimate. Frankly, I don’t think there’s a compelling AI disruption case against Shopify. These guys are mission-critical for small, and medium-sized businesses that operate online. Unfortunately, money managers are no longer willing to pay a premium multiple for this kind of company, and 64 times earnings ain’t cheap.
Photo by Roberto Cortese on Unsplash
Shopify Inc. (NASDAQ:SHOP) provides a commerce platform that helps businesses manage products, orders, payments, and customer relationships. Cramer discussed the stock during the November 5, 2026, episode, and said:
How about a stock like Shopify? I picked this one, this internet behind-the-scenes player, because I’ve done the homework, that’s why. More specifically, I was able to get into this market’s kitchen and see how the sausage was made, and I didn’t like it. Shopify’s a big company, and its stock, like so many others, trades with the futures even though it’s Canadian. That’s why the stock started going down hard. It was just right in line with Palantir, as if there was something truly wrong with this company.
The cash flow, the sales, the earnings, the outlook, these are the kinds of things that I’m asking the company’s president, Harley Finkelstein, while he is on Squawk on the Street. I’m interviewing why the stock’s in free fall. I recall, six months ago, the exact same objections, the exact same pack of lies. I said, don’t believe them. It was at 100 bucks, stock’s up 60 since then. It was a bogus rap then and a bogus rap now. Harley’s expecting a very strong holiday season despite what you might’ve read in… any press story. See, it was time to buy Shopify, not sell it.
While we acknowledge the potential of SHOP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years
Disclosure: None. Follow Insider Monkey on Google News.
