Shopify’s slowing growth raises red flags for investors
In today’s Trending Tickers, Yahoo Finance Markets and Data Editor Jared Blikre joins Julie Hyman to break down Shopify (SHOP) and the challenges the e-commerce company faces following the slowing earnings growth.
All right, let's talk about Shopify. That company out with its earnings this morning as well. Um, and the shares are down. Sounds like that there's some possibility of slowing earnings growth. I mean, the first quarter beat,
Yes.
but it looks like the focus here is on that outlook.
Yeah, so the quarter was strong, profitability held up, but Q2 revenue guide for was for the high 20s and slower than the Q1's 34%. 34%. So investors wanted a bigger raise after the stock, uh the recent runup that we've seen in the stock.
So the concern is that growth is slowing and we got three more. AI spending could hurt free cash flow, smaller merchants, they're exposed to these macro pressures we have in the K-shaped economy. AI shopping could bypass storefront. So there's that AI scare trade baked in there. And um, if we go to the let's go to the chart because
Mhm.
Mhm. Yeah.
Yeah, this one is an interesting one.
So, I got the Nasdaq 100 heat map up here, uh sorted by performance, just to show you that Shopify is the number two stock to the downside. Only
Mhm.
only worse is PayPal. That's another story there. Well, this just pulled up the six-year because I was looking at six-year, but let's um
I mean, the six year's interesting because they did reattain their pandemic peak, right? But then they've come down from those levels.
Yeah. So, here we go. They surpassed it. Yeah. Yeah, this is a 10 this is a 10 year and this really shows that story that you were just talking about. There's that pandemic peak and then they rose, rose, rose, but uh, starting last October, we saw we saw that software stocks kind of peaked and then they just bled lower. And then when we got the AI scare trade, they really kind of rocketed lower. So, that's what we're looking at right now. Uh we saw a little bit of a bump up off of the March 30 lows, uh but you're really just treading water while a lot of stocks have been knocking it out of the park and not just soft and some of those are software stocks that have done well. So, in relative to its peers, it also hasn't uh performed well recently.