Category: 3. Business

Shopify (SHOP) shares have seen some volatility recently, catching the attention of investors looking for signs of broader shifts in e-commerce demand. After trending lower over the past month, the stock is drawing more questions about valuation.

See our latest analysis for Shopify.

Shopify’s 1-year total shareholder return clocks in at 34.6%, while the share price has climbed more than 35% year-to-date. Still, after a hot run earlier this year, recent weeks have seen momentum fade a bit with a 7-day share price drop of 4.2% and a 30-day decline of 6.5%. Investors seem to be reassessing growth prospects as the company navigates a dynamic e-commerce landscape.

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The question now is whether Shopify’s recent pullback signals an attractive entry point for long-term investors, or if expectations for future growth are already reflected in the share price. Is there real upside left to capture, or is the market one step ahead?

Shopify’s most-followed narrative sets its fair value at $165.87, about 12% above the recent close of $146.04. This suggests that, even after a recent dip, there could be meaningful upside left if the narrative’s expectations play out as forecasted.

Rapid international expansion, upmarket focus, and financial ecosystem growth are diversifying revenue streams and increasing resilience amid evolving digital commerce trends. Aggressive integration of AI and emerging retail channels is boosting merchant acquisition, efficiency, and margins. This is positioning Shopify as a central digital commerce enabler.

Read the complete narrative.

What’s driving this bullish outlook? The numbers behind this valuation hinge on ambitious growth for both revenue and earnings, plus a profit multiple that puts Shopify in rare company among tech stocks. Want to find out which hidden levers and key assumptions push consensus fair value higher than the market price? Dig deeper to see what underpins this upbeat forecast.

Result: Fair Value of $165.87 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, intensifying competition from e-commerce giants and global regulatory hurdles could put pressure on Shopify’s growth, margins, and long-term outlook.

Find out about the key risks to this Shopify narrative.

While the consensus fair value hints at upside, our comparative multiples approach signals caution. Shopify currently trades at a price-to-earnings ratio of 106.8x, which is well above the US IT industry average of 31.3x, the peer average of 40.7x, and the fair ratio of 51.4x. Such a high premium suggests the stock is priced for exceptional growth, leaving less room for error if expectations fall short. Is this premium justified, or will market sentiment eventually recalibrate?

See what the numbers say about this price — find out in our valuation breakdown.

If you see things differently or want to follow your own instincts, it’s easy to dig into the details yourself and assemble a narrative in minutes. Do it your way

A great starting point for your Shopify research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Smart investors never stop searching for the next breakout play or steady growth opportunity. Don’t miss your chance to rethink your watchlist with these proven ideas:

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include SHOP.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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The slowdown has intensified pressure on Chancellor Rachel Reeves ahead of the autumn Budget.

LONDON, Nov. 14 (Xinhua) — Britain’s economy is facing a series of challenges, with growth losing momentum, inflation remaining elevated, and unemployment rising to a post-pandemic high. Ahead of the autumn Budget later this month, expectations are mounting for measures to reduce costs, boost investment, and shore up confidence.

LACK OF GROWTH MOMENTUM

The British economy slowed again in the third quarter (Q3), with real gross domestic product (GDP) edging up by just 0.1 percent, down from 0.3 percent in the previous quarter and a sharp drop from the 0.7-percent expansion recorded at the start of the year, according to data released Thursday by the Office for National Statistics (ONS).

Julian Jessop, economics fellow at the Institute of Economic Affairs, said the figures show that the stronger growth seen earlier in the year “has already fizzled out.” He noted that GDP declined in each month of Q3 before rounding.

In output terms, services grew by 0.2 percent and construction by 0.1 percent between July and September, while the production sector contracted by 0.5 percent, ONS data showed. “Growth slowed further in Q3 with both services and construction weaker than in the previous period,” said Liz McKeown, ONS director of economic statistics.

The National Institute of Economic and Social Research (NIESR) said the average month-on-month growth rate in Q3 was -0.1 percent, reflecting subdued market conditions. Anna Leach, chief economist at the Institute of Directors, said underlying momentum remains weak, with last year’s cost pressures, a softening labor market, and weak real wage growth weighing on consumer and business spending.

Real GDP per head showed no growth in Q3, highlighting the lack of improvement in living standards, according to Leach. The unemployment rate rose to its highest level since the pandemic, while consumer price inflation has held at 3.8 percent for months, almost twice the Bank of England’s 2 percent target.

BUDGET EXPECTATIONS RISE

The slowdown has intensified pressure on Chancellor Rachel Reeves ahead of the autumn Budget. Stuart Morrison, research manager at the British Chambers of Commerce (BCC), said the absence of consistent growth makes this month’s fiscal statement a make-or-break moment for business.

A recent BCC survey of more than 4,600 firms found that a quarter have scaled back investment plans, while a fifth expect turnover to worsen over the next year. Morrison urged the government to avoid further tax rises and to prioritise measures that address skills shortages, support exporting, and accelerate infrastructure projects.

Ben Jones, lead economist at the Confederation of British Industry, said businesses are looking for a clear signal that the government is committed to unlocking investment and improving competitiveness. “Not another round of tax rises or short-term fixes that would deepen the drag on growth,” he said.

Earlier this month, the Chancellor delivered a pre-Budget speech suggesting further tax increases, though she has since dropped plans for rises in income tax, according to the Financial Times.

NIESR associate economist Fergus Jimenez-England said that while GDP growth is expected to be stronger this year than last, it is largely supported by government spending rather than private-sector activity. With fiscal tightening anticipated, he warned that restoring confidence will require “a larger buffer to reduce policy churn and uncertainty.”

Ashwin Kumar, director of research and policy at the Institute for Public Policy Research, said the government needs to continue efforts to boost public and private investment, reform the planning system, and improve Britain’s trading relationship with the European Union. He added that providing greater certainty for businesses and reforming taxes to promote growth would be key.  ■

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Frankfurt-based DWS is examining whether the boom could unravel at a faster pace, Hoops said in an interview on Thursday, adding that the many retail investors sitting on big gains on stocks such as Nvidia could be quick to sell if sentiment soured.

While institutional investors studied traditional metrics to assess if stocks are overvalued, retail investors often do not and many ‘buy the dip’ when there are declines, Hoops said. How they would behave during a sustained drop was unknown, he added.

DRUMBEAT OF WARNINGS ABOUT POTENTIAL AI BUBBLE

“There’s no playbook, there’s no real history for something like that,” Hoops said at DWS’s London office.

“What’s happening is this most amazing wealth creation (for retail investors)… Nvidia stock is now worth $5 trillion. My question is simply, could it go to $100 trillion? Or would at some point you be the first one to say, ‘You know what, this is getting shaky?’”

The German giant believes AI will transform industries and Hoops did not predict a tumble, but said more evidence was needed beyond efficiency gains to sustain lofty valuations.

DWS still “loves” the data centre sector – which serves AI-driven demand for computing power – and will invest in more built assets, Hoops said, adding it was selling its stake in data centre fund NorthC as it had matured and the time was right.

REINVIGORATING EUROPEAN GROWTH

DWS’s record net inflows of 40.5 billion euros over the first nine months of this year partly reflected some overseas investors diversifying away from the U.S., Hoops said, although he added European governments needed to do more to boost growth.

($1 = 0.8575 euros)

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“We are thinking what (restrictions to dollar funding) would mean. That would have a profound impact on smaller countries, it would have a profound impact on emerging markets,” he said.

“The U.S. has an incredible toolkit for anything around dollar-clearing payments,” he said. “I think Fed swap lines are a… red line, meaning, once you do that then it changes forever.”

Hoops said any interventions would undermine faith in previously neutral market processes such as clearing.

“My personal view is that it’s difficult to see because this is almost like a last resort.”

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(Reuters) -Alphabet’s Google unit will invest $40 billion over the next two years to build three new data centers in Texas, joining peers aggressively spending to build infrastructure to support the surge in artificial intelligence applications.

The investments reflect how the global tech industry is rapidly scaling up its computing and energy capacity ​to power the next generation of AI tools and services.

Here is a list of multi-billion dollar AI, cloud and chip deals signed recently:

NVIDIA-BACKED GROUP AND ALIGNED DATA CENTERS

An ‌investor group including BlackRock, Microsoft and Nvidia is buying U.S.-based Aligned Data Centers, one of the world’s biggest data center operators with nearly 80 facilities, in a deal worth $40 billion.

GOOGLE AND TEXAS

Google will invest $40 ‌billion in three new data centers in Texas through 2027. One of the data centers will be in Armstrong County, in the Texas panhandle, and the other two in Haskell County, a stretch of West Texas near Abilene.

The company is also continuing to invest in its existing Midlothian campus and Dallas cloud region, part of the company’s global network of 42 cloud regions.

BROADCOM AND OPENAI

OpenAI has partnered with Broadcom to produce its first in-house artificial intelligence processors, the latest tie-up for the world’s most valuable startup for computing power amid surging demand for its services.

AMD AND OPENAI

AMD agreed to supply artificial ⁠intelligence chips to OpenAI in a multi-year deal that would also ‌give the ChatGPT creator the option to buy up to roughly 10% of the chipmaker.

NVIDIA AND OPENAI

Nvidia is set to invest up to $100 billion in OpenAI and supply it with data center chips, in a deal giving the chipmaker a financial stake in OpenAI. OpenAI is already an important customer ‍for Nvidia.

META AND COREWEAVE

CoreWeave has signed a $14 billion agreement with Meta to supply computing power to the Facebook parent.

NVIDIA AND INTEL

Nvidia will invest $5 billion in Intel, giving it roughly 4% of the company after new shares are issued.

ORACLE AND META

Oracle is in talks with Meta for a multi-year cloud computing deal worth about $20 billion, underscoring the social media giant’s drive to secure faster access to computing ​power.

ORACLE AND OPENAI

Oracle is reported to have signed one of the biggest cloud deals ever with OpenAI, under which the ChatGPT maker is expected to buy $300 billion ‌in computing power from the company for about five years.

COREWEAVE AND NVIDIA

CoreWeave signed a $6.3 billion initial order with backer Nvidia, a deal that guarantees that the AI chipmaker will purchase any cloud capacity not sold to customers.

NEBIUS GROUP AND MICROSOFT

Nebius Group will provide Microsoft with GPU infrastructure capacity in a deal worth $17.4 billion over a five-year term.

META AND GOOGLE

Google struck a six-year cloud computing deal with Meta Platforms worth more than $10 billion, Reuters had reported in August.

INTEL AND SOFTBANK GROUP

Intel is getting a $2 billion capital injection from SoftBank Group, making the Japanese tech investor one of the top-10 shareholders of the troubled U.S. chipmaker.

TESLA AND SAMSUNG

Tesla signed a $16.5 billion deal to source chips from Samsung Electronics,⁠ with the EV maker’s CEO Elon Musk saying that the South Korean tech giant’s new chip ​factory in Texas would make Tesla’s next-generation AI6 chip.

META AND SCALE AI

Meta took a ​49% stake for about $14.3 billion in Scale AI and brought in its 28-year-old CEO, Alexandr Wang, to play a prominent role in the tech giant’s artificial intelligence strategy.

GOOGLE AND WINDSURF

Google hired several key staff members from AI code generation startup Windsurf and ‍will pay $2.4 billion in license fees as part ⁠of the deal to use some of Windsurf’s technology under non-exclusive terms.

COREWEAVE AND OPENAI

CoreWeave signed a five-year contract worth $11.9 billion with OpenAI in March, before the Nvidia-backed startup’s IPO.

STARGATE DATACENTER PROJECT

Stargate is a joint venture between SoftBank, OpenAI and Oracle to build data centers. ⁠The project was announced in January by U.S. President Donald Trump, who said that the companies would invest up to $500 billion to fund infrastructure for artificial intelligence.

AMAZON AND ANTHROPIC

Amazon.com pumped $4 billion into ‌OpenAI competitor Anthropic, doubling its investment in the firm known for its GenAI chatbot Claude.

(Reporting by Juby Babu in Mexico City, Deborah ‌Sophia, Arnav Mishra, Jaspreet Singh, and Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila)

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Warren Buffett’s Berkshire Hathaway has built a $4.3bn stake in Alphabet, in what could be one of the conglomerate’s final new stock positions under the legendary investor as he nears retirement at the end of this year.

The new stake in Google’s parent company is Berkshire’s tenth-largest stock holding and somewhat of a deviation from Buffett’s philosophy of opting for long-term, buy-and-hold value stocks over high-growth companies.

Meanwhile, Buffett sold about $11bn worth of Apple shares in the third quarter, as he continued to trim his investment in one of his most profitable trades for the second consecutive quarter.

Berkshire disclosed it sold about 42mn Apple shares between June and September, leaving it with a position that was worth roughly $61bn at the end of the third quarter. However, the iPhone maker remains Berkshire’s biggest stock position.

Buffett sold more than two-thirds of his stake in Apple during a period from 2023 to 2024, which allowed the so-called Oracle of Omaha to lock in huge profits from the investment he first made in 2016.

In a letter to investors on Monday, Buffett said he was “going quiet”, retiring from his role as chief executive and stepping back from day-to-day responsibilities at the end of this year at the investing conglomerate he built.

Other than Apple and now Alphabet, Berkshire’s top stock holdings do not include investments in Big Tech companies. Its other largest positions, which remained largely unchanged for the third quarter, include American Express, Bank of America and Coca-Cola.

Despite Berkshire’s new position in Alphabet, the conglomerate continued to be a net seller of stocks during the period for the third consecutive year, offloading more than $6bn of equity investments in the third quarter. Over the past three years, Berkshire has sold about $184bn of stock.

Buffett’s vote of confidence in Alphabet underscores the turnaround in Google’s fortunes in its battle for dominance of the artificial intelligence market over the past year, while Apple is increasingly seen as falling behind Silicon Valley rivals in the AI race.

Google was caught flat-footed by the debut of ChatGPT in November 2022, and its first efforts to launch a rival chatbot misfired, driving fears that its core search advertising business would suffer as users switched to AI assistants to find online answers.

But this year has seen rapid improvements in Google’s AI capabilities. At the same time, its core search business has proved more resilient than some on Wall Street expected, with Alphabet’s total revenues hitting a record $100bn in the most recent quarter.

At Friday’s close, Apple’s stock had risen by about 12 per cent this year, while Alphabet is up 45 per cent, outrunning even AI chipmaker Nvidia to be the best-performing Big Tech stock so far in 2025.

Fitch Ratings upgraded Greece’s rating status by a notch, saying the country is forecast to continue a debt decline and projected to have another budget surplus despite plans for fiscal easing.

The firm lifted Greece’s long-term sovereign rating to BBB from BBB- with a stable outlook, according to a statement on Friday. Following the move, all major rating agencies now place the country two levels above the junk territory except for Moody’s Rating, which places Greece one notch lower.