Should You Buy Shopify Stock Before It Joins the Nasdaq-100 Index?

Shopify (SHOP) stock is up more than 7.5% today after the company announced plans to transfer its listing from NYSE to Nasdaq effective March 31, while maintaining its TSX listing. This signals a strategic realignment that could enhance SHOP’s visibility among U.S. investors by potentially facilitating the stock’s inclusion in key market indices - namely, the benchmark Nasdaq-100 Index ($IUXX). 

Valued at $121 billion by market capitalization, SHOP easily outmuscles some of the smaller components of the Nasdaq-100, such as MongoDB (MDB) and On Semiconductor (ON), at less than $20 billion each. 

News of the imminent Nasdaq move, coupled with the company's partnership with Braze for enhanced personalized shopper engagement, has contributed to SHOP’s stock rally today.

What’s Driving Growth at Shopify?

Shopify's strategic positioning in the e-commerce landscape continues to strengthen, as evidenced by its commanding 30% market share in the U.S. market and impressive processing of over $94 billion in GMV in the latest quarter. The company's financial performance has been exceptional, with net income soaring to $2.02 billion in late 2024, representing a dramatic increase from $132 million in the previous year.

The acquisition of Vantage Discovery, an artificial intelligence (AI) search company, demonstrates Shopify's commitment to technological advancement and improved customer experience, while its expansion into omnichannel solutions and financial services through Shop Pay presents multiple growth vectors. 

With e-commerce projected to capture 21.4% of retail sales by 2029, up from 17.3% in 2024, Shopify is well-positioned to capitalize on this secular trend. The company's Q4 performance further reinforces its growth trajectory, showing a robust 31% year-over-year revenue increase and an impressive 62% growth in operating income.

Key Chart Levels to Watch for SHOP Stock

Up 30.45% over the past 52 weeks and 126.37% over the past two years, SHOP has easily outperformed the broader equities market. More recently, Shopify stock exhibited significant volatility, plummeting to a critical support level near $90 in mid-March, marking a substantial decline from previous trading levels. 

In the process, SHOP filled a bull gap from last November, and the price action showed resilience by bouncing off this support zone, culminating in a robust recovery that pushed the stock back above $100, with particularly heavy trading volume supporting today’s rally. 

Technical indicators reveal the stock is currently trading below its 20-day simple moving average (SMA) at $103.91, while the 200-day SMA at $88.17 provides underlying support. The RSI reading of 46.46 suggests neutral momentum, though the recent price action has formed a potential bottoming pattern with higher lows. 

Looking forward, a bullish scenario could unfold if the stock maintains momentum above $100 and breaks through the 20-day SMA, while a bearish case would materialize if support at $90 fails, potentially leading to a test of the 200-day SMA.

The Bottom Line on SHOP Stock: Buy, Sell, or Hold?

Wall Street analysts maintain a relatively upbeat consensus "Buy" rating on SHOP, with 26 “Strong Buys” out of 44 total recommendations - but technical indicators suggest some possible choppiness in the short term, even as the long-term and medium-term signals remain strong. This suggests investors should exercise caution and potentially wait for a more convincing upward trend, as indicated by a sustained move above the 20-day moving average, before initiating a position in SHOP.