Here's Sands Capital Select Growth Strategy's Views on Shopify (SHOP)

ands Capital, an investment management company, released its “Sands Capital Select Growth Strategy” Q2 2025 investor letter. A copy of the letter can be downloaded here.  U.S. large-cap growth equities recovered from a sharp sell-off in early April by delivering strong returns in the second quarter. The quarterly performance was driven by muted inflation, strong corporate earnings, and improving sentiment around artificial intelligence (AI) and global trade. The portfolio returned 27.7% in the quarter, outperforming the benchmark Russell 1000 Growth Index's 17.8% gain. You can check the fund’s top 5 holdings to know more about its best picks for 2025.

In its second-quarter 2025 investor letter, Sands Capital Select Growth Strategy highlighted stocks such as Shopify Inc. (NASDAQ:SHOP). Shopify Inc. (NASDAQ:SHOP) provides a cloud-based commerce platform and services. The one-month return of Shopify Inc. (NASDAQ:SHOP) was 6.20%, and its shares gained 98.64% of their value over the last 52 weeks. On September 15, 2025, Shopify Inc. (NASDAQ:SHOP) stock closed at $147.89 per share, with a market capitalization of $191.245 billion.

Sands Capital Select Growth Strategy stated the following regarding Shopify Inc. (NASDAQ:SHOP) in its second quarter 2025 investor letter:

"Shopify Inc. (NASDAQ:SHOP) is a leading global provider of ecommerce solutions for merchants operating outside of Amazon’s ecosystem. In the first quarter, Shopify overcame concerns about macroeconomic uncertainty and tariff-driven price increases to grow gross merchandise value (GMV) by over 20 percent. This marked the seventh consecutive quarter of GMV growth exceeding 20 percent and the fifth straight quarter growing at more than twice the pace of overall U.S. ecommerce. Free cash flow margins expanded by 300 basis points, supporting an eighth consecutive quarter of free cash flow growth above 25 percent. In our view, these results reinforce the case for Shopify’s long-term growth potential. We expect the business to continue outpacing the broader ecommerce market, driven by new merchant additions, higher same-store sales, increased take rates, and ongoing expansion across international markets and larger retail segments."

Shopify Inc. (NASDAQ:SHOP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 69 hedge fund portfolios held Shopify Inc. (NASDAQ:SHOP) at the end of the second quarter, compared to 77 in the previous quarter. Shopify Inc. (NASDAQ:SHOP) delivered $2.7 billion of revenue in Q2 2025, up 31% year-over-year. While we acknowledge the potential of Shopify Inc. (NASDAQ:SHOP) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Shopify Inc. (NASDAQ:SHOP) and shared the list of best tech stocks to buy according to Cathie Wood. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.