Technology stocks chopped around to start 2025. The Nasdaq and the S&P 500 have held their ground at their 50-day moving averages as Wall Street is content to let the market cool following the impressive post-Trump election rally and the stellar two-year run.

Despite the flood of earnings reports, the tariff battles, the DeepSeek news, and beyond, the market remains above its post-election breakout levels.

See the Zacks Earnings Calendar to stay ahead of market-making news.

The sideways movement and the rapid comebacks many artificial intelligence (AI) stocks made following their DeepSeek selloffs have left investors searching for tech stocks to buy at discounts.

Shopify offers investors the chance to buy a growth tech stock trading over 25% below its record highs even though it has skyrockted over the last few years.

Why This Amazon Competitor Is a Must-Buy Tech Stock with Huge Long-Term Upside

Shopify Inc. SHOP stock has soared 360% off its 2022 lows, crushing the Tech sector’s 110% and Amazon’s 105%. Yet, SHOP trades 27% below its 2021 highs while Tech and Amazon trade near records.   

SHOP stock is breaking out to new 52-week highs heading into its Q4 earnings release on Tuesday, February 11. Shopify stock is also attempting to break above key levels from early 2022. The nearby chart also shows that Shopify’s long-term 50-week moving average recently crossed above its 200-week, something technical trades call the golden cross.

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Shopify is an e-commerce powerhouse with technology spanning website creation and design, sales tools, marketing help, payment solutions, automation offerings, inventory management, and much more.

Shopify stand outs against its much larger e-commerce rival Amazon AMZN by catering to sellers and businesses. Amazon, on the other hand, focuses on getting consumers products as fast as possible at the lowest price.

Shopify’s customers span entrepreneurs, small and mid-businesses, and larger enterprises. The company has expanded its in-person retail solutions and it aims to help its customers in four core phases of business: start, sell, market, and manage.

Shopify’s days of 60% revenue growth are over, but it made up for slowing customer acquisition growth with higher prices and a focus on profits. Shopify raised its prices in 2023 (by roughly 30% for its various plans) for the first time in over a decade.

Shopify is also committed to streamlining its business during the higher interest rate environment to help drive profits (SHOP's valuation levels are holding back the stock, which we will get to).

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Shopify is projected to grow its sales by 25% in 2024 and 22% in 2025 to surge from $7 billion to $10.71 billion in FY25 (SHOP did $1.6 billion in sales in pre-Covid 2019).

More importantly, SHOP is expected to boost its adjusted earnings by 70% in FY24 and another 19% in FY25 to reach $1.51 per share vs. $0.74 in 2023.

SHOP crushed our EPS estimates by an average of 25% in the trailing four quartets and its Most Accurate estimate for Q4 came in 23% above consensus at +$0.54 per share

Is Shopify Stock Ready for a Breakout?

Shopify’s 10-for-1 stock split in mid-2022 helped make it more attainable to a larger swath of investors (currently trading for roughly $122 a share).

SHOP’s valuation is holding the stock back, trading at 103X forward 12-month earnings compared to Tech’s 26.1X and Amazon’s 37.8X.

That said, SHOP’s 2.4 PEG ratio, with factors in its long-term earnings growth outlook, marks a roughly 90% discount to its recent highs and a much smaller premium compared to the Zacks Tech sector’s 1.7.

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Shopify stock was a Wall Street star long before Covid. Shopify has soared over 4,100% since its 2015 IPO, blowing away Amazon’s 1,000% and Tech’s 315%.

SHOP's run includes a 160% climb in the past five years, with its recent surge helping it outpace Tech during this stretch despite trading 27% below its highs.  

If Shopify offers strong earnings guidance, it might be ready to break out higher and start marching closer to its 2021 peaks. It is also worth stressing that SHOP’s offerings are critical to its customers and its balance sheet is stellar. 

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