6. Shopify Inc. (NASDAQ:SHOP)
Shopify Inc. (NASDAQ:SHOP) was among the stocks on Jim Cramer’s radar on Mad Money as he discussed the upcoming earnings. Cramer said he thinks the company will report “good numbers,” as he commented:
Alright, I want to monitor Shopify when it reports Tuesday because the universal fulfillment company has a great read on small to medium-sized businesses. I always worry about them, but this company is the chief e-commerce enabler for these smaller companies. Stock’s been meandering of late. I think it’s going to have good numbers. We’ll have to find out, though.
Shopify Inc. (NASDAQ:SHOP) provides a commerce platform that helps businesses manage products, orders, payments, and customer relationships. Cramer addressed the AI worries around the stock during the April 13 episode and said:
I think there’s a strong case to be made for why Shopify should not be considered a potential AI displacement victim. And I got some chart commentary on the stock this weekend from Larry Williams. He’s that legendary technician and stock market historian who thinks it’s ready to rally right here, right now… This is a pretty simple story because Shopify keeps putting up excellent numbers… Like so many of these stocks that have been hammered by AI worries, it’s impossible to argue that Shopify is cheap, okay? Stock trades at around 62 times this year’s earnings estimates. On the other hand, it’s much cheaper than it used to be… Given the fact that the company is expected to grow its earnings per share at a 30% clip, well, paying 62 times earnings for the stock isn’t that crazy…
Check out this weekly chart of Shopify… He points out that the stock has a strong pattern of rallying at this time of year from April into at least August. We’ve gotten that move… in 7 of the last 10 years. Historically speaking, the stock’s got a 70% chance of running until August… Right now, Shopify’s in the undervalued… zone… This chart shows you the level of professional buying or selling in Shopify. Lately, Larry points out that the stock’s been under institutional accumulation… Larry particularly likes the way Shopify broke down to a new closing low on Friday. If the stock can close above that level, and it already has today, then he thinks that could be your entry point.
I think this is so exciting. You got the fundamentals really turning up, okay, I mean, always been good consistently. You’ve got this AI thing that doesn’t really have any cogency with me, and you’ve got the Williams’ trading cycles. Come on. Here’s the bottom line: Whether you’re looking at the fundamentals or the charts interpreted by Larry Williams… Shopify’s stock has come down too far, too fast. I think Larry’s right to expect that this one could give us another terrific springtime rally. I like Shopify.
While we acknowledge the potential of SHOP to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than SHOP and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see 5 Stocks on Jim Cramer’s Radar: Berkshire, Palantir, and Eaton.
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