Why Shopify Stock Was Climbing Today

Shares of Shopify (NASDAQ: SHOP) were moving higher today in line with a number of growth stocks in a day with broad gains across the market.

The e-commerce software company seemed to benefit from favorable comments from Fed Chair Jerome Powell about lowering interest rates. Additionally, stocks rose on news of a ceasefire between Iran and Israel, though that seemed to have less of a direct effect on Shopify.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

As of 3:21 p.m. ET, the stock was up 4.6%. At the same time, the Nasdaq Composite was up 1.6%.

Image source: Getty Images.

Shopify gets a boost

There was no company-specific news out on Shopify, but as an e-commerce software company with a high valuation, Shopify is sensitive to the macroeconomic cycle, including interest rates.

On Tuesday, Fed Chair Jerome Powell said in remarks before Congress that rate cuts could come "sooner rather than later," though he stressed that the central bank could wait to see how tariffs play out.

In its "dot plot" forecast last week, the Fed maintained its prediction that it would cut the Fed funds rate by 50 basis points over the remainder of the year, the same forecast it made earlier this year, meaning investors should expect two 25 basis-point cuts in the remaining four meetings.

That's good news for Shopify as rate cuts should lower the discount rate in the discounted cash-flow valuation investors use to value stocks like Shopify. Lowering the discount rate increases Shopify's valuation.

What's next for Shopify

With its legions of small-business sellers, Shopify is at risk from higher tariffs, but the company offered strong guidance in its first-quarter earnings report, calling for mid-20s revenue growth rate and a free-cash-flow margin in the mid-teens.

If it can maintain those numbers, the stock should continue to rise over the long term.

Should you invest $1,000 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 $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,692!*

Now, it’s worth noting Stock Advisor’s total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Jeremy Bowman has positions in Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.