Shopify is set to make a significant advancement this month by officially joining the Nasdaq 100 and the Nasdaq-100 Equal Weighted Index, effective prior to market opening on May 19, 2025. This transition involves Shopify replacing MongoDB, Inc., a software company, in both indexes.
The timing of this announcement follows Shopify’s recent strong performance in its Q1 results, showcasing the company’s sustained growth. Mark Zgutowicz, a leading analyst from Benchmark, reiterated a ‘Buy’ rating for Shopify, emphasizing the firm’s ability to gain market share amidst a challenging economic environment.
Being included in the Nasdaq 100 symbolizes a notable distinction for Shopify, placing it among the 100 largest non-financial companies on the Nasdaq Stock Exchange. This upgrade is expected to bring a substantial influx of institutional capital and increased visibility for Shopify.
Year-to-date, Shopify’s stock has surged 56%, and this inclusion might catalyze further price appreciation as it attracts institutional investors. The addition is likely to compel index-tracking ETFs, mutual funds, and other investment vehicles to buy Shopify shares, further driving demand.
Shopify’s recent quarterly performance was also commendable, reporting $2.36 billion in revenue and earnings of 26 cents per share, meeting Wall Street’s expectations while slightly exceeding revenue forecasts. However, its gross merchandise volume (GMV) of $74.75 billion, an increase of 22% year-over-year, fell short of the analysts’ projection of $76.09 billion. Nevertheless, Shopify’s executives expressed confidence, suggesting that recently announced tariffs should not significantly hinder GMV growth due to the company’s extensive international presence and diverse merchant base.
Mark Zgutowicz praised Shopify’s first-quarter GMV growth of 24.8%, which he described as “nothing short of impressive” given the current economic uncertainties. He highlighted the company’s share gains, particularly in the U.S. e-commerce sector, as encouraging indicators for Shopify’s ongoing business momentum. He noted that enterprise adoption could serve as a primary growth driver in the future, with positive trends in key categories like apparel and health and beauty fostering confidence in Shopify’s prospects.
Currently, Wall Street exhibits a Moderate Buy rating for Shopify, supported by 24 Buy ratings and 12 Holds over the past three months, with an average price target of $117.42 indicating a potential upside of nearly 28% from current levels.
The inclusion in the Nasdaq indexes not only enhances Shopify’s status but also positions it for further growth in the evolving e-commerce landscape, underscoring a hopeful outlook for investors and stakeholders in the company.