Jim Cramer on Shopify (SHOP): "Shopify Is More Than a Poor Man's Amazon"

We recently published a list of 21 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Shopify Inc. (NASDAQ:SHOP) stands against other stocks on Jim Cramer’s radar.

On Friday, Mad Money host Jim Cramer discussed this week’s main market drivers and placed emphasis on earnings reports and recent economic data.

“When you get a strong employment report like we did this morning, it does a lot of things that you need to know about. First, it takes a near-term recession kind of off the table. Very difficult to have recession with a 4.2% unemployment rate. That’s just too much demand for workers.”

READ ALSO Jim Cramer’s Thoughts on These 13 Stocks and 8 Stocks on Jim Cramer’s Radar Recently

Beyond that, Cramer pointed out that strong employment data also influences the Federal Reserve’s thinking, especially ahead of this week’s policy meeting. He explained that a tight labor market discourages the Fed from lowering interest rates.

Lastly, he noted that this kind of labor report can trigger a strong rally in stocks, provided that wage inflation remains under control. Cramer emphasized that while the government releases a constant stream of economic figures, none carry the same weight as the jobs report. He noted, “That is the real predictive power when it comes to the stock market.”

“So keep in mind that today’s rally may not be one off as we go through our game plan for next week. But first, let me just say we’re over the hump. We’ve now had companies that reported fabulous numbers.”

Furthermore, another driver behind Friday’s market surge, according to Cramer, was news out of China suggesting a possible diplomatic overture. He said the rally accelerated after reports surfaced that Chinese officials were considering a deal involving tougher action against fentanyl. If the proposed agreement materializes, Cramer believes it could extend the rally further. He said, “If that comes true, I expect this rally will have legs.”

“Here’s the bottom line: We know that we’re living through a time of great tumult. We could easily be thrown off if President Trump responds harshly to this Chinese olive branch this very weekend. If that happens, there could be some unwinding to do. Right now, though, it looks like the momentum can keep up as long as we don’t get a total breakdown in the nascent trade talks between the world’s two biggest nations.”

Our Methodology

For this article, we compiled a list of 21 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on May 2. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Shopify Inc. (NASDAQ:SHOP)

Number of Hedge Fund Holders: 64

Cramer said people tend to realize that Shopify Inc. (NASDAQ:SHOP) is much more “than just a poor man’s Amazon” once they delve into its earnings report.

“Thursday, we get Shopify’s numbers. Here’s another stock that tends to sell off on good news and then rallies when people parse it out and realize that, wow, this company’s more than just a poor man’s Amazon.”

Shopify (NASDAQ:SHOP) provides a platform that enables merchants to manage and sell products through multiple channels. It offers tools for inventory control, payment processing, analytics, and securing financing. Artisan Partners stated the following regarding Shopify Inc. (NASDAQ:SHOP) in its Q4 2024 investor letter:

“Among our top Q4 contributors were Atlassian and Shopify Inc. (NASDAQ:SHOP). Our conviction in Shopify grew after it decided to exit the logistics business in favor of a capital-light partnership model, which we viewed as significantly narrowing the downside range of outcomes and allowed it to focus on what it does so well: developing great e-commerce software solutions for brands of all sizes. We have been encouraged by Shopify’s subsequent pace of innovative new product enhancements, including using AI assistants to help brands run their businesses. Shares rallied after the company reported strong earnings results, including 24% growth in gross merchandise volume, and management raised its forward guidance.”

Overall, SHOP ranks 17th on our list of stocks on Jim Cramer’s radar. While we acknowledge the potential of SHOP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SHOP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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