Could Shopify overtake Amazon in stock value by 2035?

In the ever-changing world of e-commerce, Shopify and Amazon stand out as unavoidable giants. While Shopify recently posted an impressive performance in its third quarter, some wonder if this momentum will allow it to one day overtake Amazon in stock value. This article explores the strengths of the two companies and assesses the likelihood of Shopify achieving this ambition by 2035.

Shopify: a booming player

Shopify has undeniably seen spectacular growth recently, with jump of 21% of its action following solid financial results in the third quarter. Although still 38% below its 2021 peak, this performance shows renewed enthusiasm among investors. Shopify is known for its e-commerce platform that allows merchants to easily sell online, earning the nickname « anti-Amazon » among small e-tailers.

However, although Shopify attempted to enter the logistics business, the company ultimately made the decision to focus on its core business of providing software.

Despite its more modest size, with a market capitalization around 140 billion dollars, Shopify continues to grow rapidly, posting a revenue increase of 23% during the first nine months of 2024.

Amazon: a diversified empire

Faced with Shopify, Amazon remains an imposing giant with a market capitalization exceeding 2.2 trillion of dollars. Its dominant position is reinforced by its multiple areas of activity, notably the online commerce sector and cloud computing with AWS. The latter continues to grow rapidly, recording revenues of nearly 79 billion dollars in the first three quarters of 2024, with an impressive operating margin of 38%.

Although Amazon’s online sales have slowed recently, the growth potential of AWS and other initiatives provides Amazon with strong levers to maintain its position at the top of the market.

KPIs that could shape the future

Shopify is banking on operating margins of around 10%, superior to some of Amazon’s competing divisions which are below 5%. This could give Shopify an advantage in certain segments, although Amazon’s massive scale remains a limiting factor for Shopify.

Additionally, Amazon benefits from its significant investments in artificial intelligence and cloud infrastructure, strategic areas for the future.

A race to gigantism?

Although Shopify shows signals of impressive growth, other elements suggest that Amazon’s scale protects it from any rapid reversal of its dominance. With continued growth potential in AWS and other key segments, Shopify must not only capitalize on its current momentum, but also on its future innovations and strategies to hope to close this gap.

The outlook for Shopify remains encouraging, and three good reasons to invest are regularly highlighted, which contributes to investor optimism.

It is also important to monitor the market movements and their implications for these two giants, as the e-commerce landscape could still change radically by 2035.