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Down 25%, Is Shopify Stock a Better Buy than SpaceX and the "Magnificent Seven" Stocks in September?

Source The Motley Fool

Key Points

Shopify continues to grow at a rapid clip, but investors may balk at its valuation.
SpaceX also seems pricey, but other "Magnificent Seven" stocks appear increasingly attractive.
10 stocks we like better than Shopify ›

Shopify (NASDAQ: SHOP) has struggled since peaking at $179 per share nearly one year ago. While the company continues to grow at a brisk pace, conservative guidance and concerns about artificial intelligence (AI) disruption have weighed on the stock.

Additionally, its valuation may appear elevated. In that regard, it may look cheap compared to Space Exploration Technologies (NASDAQ: SPCX), but Shopify is certainly more expensive than most "Magnificent Seven" stocks.

Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »

Knowing that, should investors buy Shopify rather than any of the above stocks? Let's take a closer look.

Image source: Getty Images.

Comparing Shopify to the tech giants

Shopify has emerged as a leading e-commerce platform for businesses of all sizes. Its platform makes it easy for entrepreneurs to design a professional-looking e-commerce site, even without coding experience.

While numerous companies can match that, Shopify has built a competitive advantage in its service offerings. These businesses can also manage workflow automation, email campaigns, payments, and numerous other services within a single ecosystem.

In the first half of 2026, revenues of $6.7 billion rose 34% over the previous year. Also, since costs and expenses grew more slowly than revenue, the company's net income of $921 million over that period was far above the $224 million reported in the year-ago period.

Still, analysts forecast 32% annual revenue growth and a 26% increase in 2027, with the stock trading at 89 times earnings. The growth has not come cheap, and the forward P/E of 69 indicates that some investors will probably not be buying Shopify at these levels.

Moreover, that valuation places Shopify between SpaceX and the Magnificent Seven, other than Tesla. Without a profit, SpaceX has no P/E ratio, but its price-to-sales (P/S) ratio of 93 far exceeds Shopify's 13 sales multiple.

Instead, where Shopify may struggle is against some of the Magnificent Seven stocks with lower valuations. There, the one to choose is probably Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), which sells for 17 times earnings.

Right now, Alphabet's Gemini AI platform is one of the industry's top AI engines. Also, with Waymo set to generate "meaningful" revenue in 2027, it appears poised to offer growth at a lower price.

In the first half of 2026, its revenue grew by 24%, up from the 14% increase in the previous year. That growth is somewhat slower than Shopify's, but its revenue growth is nonetheless rising. Also, considering that Google Cloud revenue rose 82% in the latest quarter, it may not trade at that low valuation for long.

Should investors choose Shopify or another top tech stock?

Although Shopify should continue to grow, tech giants like Alphabet are probably better buys at this time.

Shopify should continue to benefit from its leadership in e-commerce platforms. However, at 70 times forward earnings, investors have to pay a considerable premium.

With Alphabet, that premium is not there. Additionally, as its revenue growth accelerates, especially in Google Cloud, it is probably more likely to pay off for investors than either Shopify or another Magnificent Seven stock at these levels.

Should you buy stock in Shopify right now?

Before you buy stock in Shopify, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Shopify wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $433,160!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,296,254!*

Now, it’s worth noting Stock Advisor’s total average return is 949% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of September 16, 2026.

Will Healy has positions in Shopify. The Motley Fool has positions in and recommends Alphabet, Shopify, and Tesla. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

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