As one of the more polarizing growth stocks in the market over the past few years, Shopify (NYSE:SHOP) stock certainly has its share of bulls and bears. However, one of the more prominent bulls on SHOP stock is Cathie Wood. This is evidenced by her previous support for Shopify in Ark Invest portfolios.
Wood’s belief in Shopify appears to continue to be on display. Yesterday, Cathie Wood bought up more shares of SHOP stock — totaling roughly $35 million — for her various funds.
Many investors may want to pay attention to this news. Indeed, last year’s performance for all of Ark’s exchange-traded funds (ETFs) was dismal. However, Cathie Wood’s funds have outperformed the market once again this year, seeing an impressive rally as investors take a risk-on approach to equities.
Can this continue? Let’s dive into what to make of this specific move — and what investors should consider with SHOP stock moving forward.
SHOP Stock Sinks, Despite Support From Cathie Wood
Generally speaking, the best time to buy a stock is when it’s down. That seems to be the view Cathie Wood is taking with Shopify, having bought shares after they dipped on Thursday’s disappointing forward-looking guidance.
Wood’s perspective on Shopify is clearly long-term. In this regard, if e-commerce truly is a winner-take-most space, perhaps such a view will pay off nicely. In many respects, I think the purchase certainly makes sense, especially when considering how beaten-up SHOP stock has been over the past year.
That said, Shopify — and other high-growth peers, for that matter — has rebounded well off its late 2022 lows. Thus, there’s also some downside risk to these kinds of stocks, if investors begin to price in a “stagflationary” environment for an extended period of time.
I don’t know where the market is headed from here, but I do like Wood’s conviction in SHOP stock. If she’s right, Shopify could be a big win five or 10 years from now.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
