What Offers Shopify (SHOP) a Durable Growth Profile?

TCW funds, an investment management company, released its “TCW Concentrated Large Cap Growth Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equity markets continued their rally in the third quarter, driven by continued optimism around AI investments and positive corporate earnings. Against this backdrop, the fund (I share) returned +4.11% in the quarter compared to +10.51% for the Russell 1000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, TCW Concentrated Large Cap Growth Fund highlighted stocks such as Shopify Inc. (NASDAQ:SHOP). Shopify Inc. (NASDAQ:SHOP) is a commerce technology company that provides a cloud-based platform to start, scale, market, and run a business. The one-month return for Shopify Inc. (NASDAQ:SHOP) was 6.34%, and its shares gained 53.79% over the last 52 weeks. On December 24, 2025, Shopify Inc. (NASDAQ:SHOP) stock closed at $169.45 per share, with a market capitalization of $220.597 billion.

TCW Concentrated Large Cap Growth Fund stated the following regarding Shopify Inc. (NASDAQ:SHOP) in its third quarter 2025 investor letter:

“Shares of Shopify Inc. (NASDAQ:SHOP) (SHOP; 2.90%**) rallied after the company reported strong quarterly results and raised forward guidance. Revenue and GMV (Gross Merchandise Value) both accelerated to 31% YoY growth, with the company growing across all major verticals and merchant segments. International GMV grew 42% YoY and GMV in Europe grew 49% YoY. The company added 16 new countries for payments this year. Encouragingly, Shopify Plus has moved beyond organically helping grow smaller brands grow into larger brands, as larger enterprises (e.g. Starbucks†, Burton, Miele, Michael Kors), are adopting Shopify Plus at an increasing pace. We remain constructive on shares given SHOP’s track record of innovation, ability to penetrate new markets, and durable growth profile.”

Shopify Inc. (NASDAQ:SHOP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 91 hedge fund portfolios held Shopify Inc. (NASDAQ:SHOP) at the end of the third quarter, compared to 69 in the previous quarter. In Q3 2025, Shopify Inc.’s (NASDAQ:SHOP) revenue increased 32% year-over-year. While we acknowledge the risk and potential of Shopify Inc. (NASDAQ:SHOP) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Shopify Inc. (NASDAQ:SHOP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Shopify Inc. (NASDAQ:SHOP) and shared the list of best non-US stocks to buy according to hedge funds. In its investor letter for Q3 2025, Sands Capital Global Growth Fund noted that Shopify Inc. (NASDAQ:SHOP) share price increased following the quarterly earnings report. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.