Shopify has strong fundamentals and long-term upside but is expensive and carries competitive risks.

Um so especially here chat if you know something that we don't know if we're not up to date with this company uh please tell us otherwise Sean do you have an intuition let's say where to put Shopify.

Um I think when we covered it quality is good price was too high. Um I would need to check on the spot basically what we're talking in terms of where the stock has been going. Year to date we're down 7 and a half% that's not too much. 12 months, 6% up.

Um, so we're still trading at a pretty hefty valuation.

Um, it's quite an expensive stock and then in terms of quality or the tenure horizon I would probably put it B2. Um, do you see that differently? I like Shopify a lot and um I think we should revisit it.

Um you know Shopify for anyone who doesn't really know the business just to quickly say it um they are uh sort of a a white glove uh solution to uh small businesses. So basically they create uh a commerce platform.

So if you want to uh you know start a company selling uh you know some sort of product u they build out the entire ecosystem for you all the logistics you know

>> significantly more comprehensive you know everything from payment processing to actually the logistics and supply chain of your order um helping you build out a website testing out different types of advertising campaigns um they do everything.

And so really, if you're um I think the question is, you know, how will um AI change the way we shop? You have a lot of people that think that we're just going to delegate uh you know, you're just going to tell your agent to go out and buy something for you and then they might bypass the individual websites uh and and just go to Amazon and go to these big aggregators and and find something that's good enough for you.

I don't necessarily agree with that premise. I I I don't see everybody just outsourcing shopping to agents. Um I think you want to, you know, see the the uh aderondic chairs that you're buying on Amazon and you you know, you want to see the uh the curtains that you're buying.

You know, you don't want to just delegate everything to an agent. Uh I I I I'm very skeptical of that take.

Um so you know that was one of the ideas is that uh basically um people would stop going directly to these small business websites um because of agents. Uh the agents would prefer to go to Amazon or Walmart or whatever it is.

And actually I was just listening to an interview uh with um I think his name is Michael Warden. Uh it was on uh Ben Thompson's uh paid podcast uh or it's a paid to access podcast.

It's very very good. Um I'm not we're not affiliated but uh I would recommend it. It's not super expensive. Um and anyways uh they had a a really interesting conversation where uh he was saying that you know according to his research um despite the fact that he did extensive prompting with a number of LLMs asking them um what they would be you know if if somebody came with a query about um buying an e-commerce product uh which platform would they be you know the directly to the small business or you know medium-sized business website or would they um you know be more likely to route people to the to a product or to the product or a similar version of the product on Amazon.

Um and what he found is that there's been uh just in the last year like a four times increase in the amount of traffic to uh these these uh you know company websites as opposed to Amazon itself. with the point being that uh you know if everything just goes to Amazon then yeah Shopify dies but if people continue to want to go directly to uh the business's websites um and you know directly to uh those brands that really is uh what is going to define Shopify's success long term.

So um I think there's some real AI uncertainty here. I think just legitimately there's a major competitive risk uh risk with from Amazon that we talked about a lot in the episode.

Um I'm very very bullish on Shopify. Uh I think that um their potential to continue to move up market and help more brands um is dramatic. It's a huge runway, but like I said, there's a pretty wide band of uncertainty.

So, um, not only because of AI, but, uh, really also just because of Amazon, um, as a competitor. I would probably put them in the B tier where, um,

>> like I said, I I I can put together a really strong bull thesis on why Shopify will be uh, a much better business, a much bigger business 10 years from now. But I do think that there are, you know, legitimate uncertainties.

And then in terms of valuation, um, like you said, it's it's an expensive stock. It has been an expensive stock. Uh, yeah, it would be I I couldn't put put it above Airbnb.

>> I I would probably Yeah, I would probably put it even below Airbnb. >> yeah, >> I think it's a richly priced stock. You have to really buy into to the growth story uh and the value ad.

I think like personally for me I think we mentioned before for example that um e-commerce penetration in the US is only about you know is probably 20% and then China is about 32%.

I still sometimes you look at these numbers and they make it seem like there's still huge room to grow. Um at the same time the US market in terms of e-commerce is quite mature.

Um so I think there's a natural barrier like ceiling for how much more um room there is to grow for these companies and especially the e-commerce channel in general.

Um, what I want to say with that is I don't think Amazon's that big of a threat because to me they're two different things. Like there's certain products that when I look for them, I go on Amazon immediately.

I don't even look at Google and then type it in and then I go through Amazon. It's more me going to Amazon in the first place. And then there's stuff that I just I look up on Google.

And I couldn't give you a percentage, but I feel like the vast majority of, you know, store places or like storefronts that I go on is a Shopify store, even if you don't know it.

So whenever you're not on Amazon, it feels like you're going to Shopify. And to me, that's like a very distinct um shopping experience.

I think Amazon has a well I wanted to say niche like a very wide niche and then Shopify is the same. And I don't think they overlap to the extent um that we think. I think there are some things that Amazon actually wanted to get into that's closer to what Shopify is doing. That's more of the bare thesis.

And especially right now I mean we had the chart on how much money is currently spent on AI and how much talent is going to the AI space. When I think about Google, when I think about Amazon and these sorts of companies, I think most of their talent and money will be spent on AI and not to the capacity of how can we start disrupting Shopify.

Um, so I don't think that will be a huge um problem in the long term.

I think BT is fair because I mean to be completely honest like A and B tier, we only have high quality companies here. Um, so I think it makes a lot of sense um to put it there and then value today it is certainly more expensive.

Shopify, we just discussed Meta, we had last week, um, MS, LVMH,