1 Brilliant Growth Stock to Buy Now. It could join Apple, Nvidia and Amazon as a $1 trillion company by 2040.

Six publicly traded US companies have market values ​​of at least $1 trillion. From largest to smallest, that elite group includes Apple, Microsoft, Nvidia, Alphabet, Amazonand Meta platforms. But more companies will join the list as the global economy expands in the coming years.

For example, Shopify (STORE 0.05%) it’s currently worth $101 billion, but its market value could reach $1 trillion before 2040. If that happens, Shopify stock will return 890% over the next 15 years, which equates to 16, 5% annually.

Here’s what investors should know about this brilliant growth stock.

Shopify is a leader in e-commerce and omnichannel software

Shopify is the market leader in e-commerce and omnichannel commerce software. What sets the company apart is its unique ability to simplify retail. Its platform enables merchants to run their businesses across physical and digital channels from a single dashboard. It integrates with online marketplaces like Amazon and social media platforms like Facebook and Instagram Meta and helps merchants build direct-to-consumer websites.

Shopify also offers adjacent solutions for marketing, payments, and logistics, and addresses back-office functions such as tax compliance, bill payments, and fraud protection. In addition, the company is targeting larger brands with Shopify Plus and Commerce Components. The former is an enterprise-level platform with more sophisticated features than the standard Shopify software, and the latter allows businesses to build commerce platforms from scratch using individual parts of the Shopify technology stack.

Importantly, Shopify Plus and Commerce Components include solutions for business-to-business (B2B) e-commerce, also called wholesale. According to Grand View Research, this market is three times larger and growing twice as fast as e-retail. In the second trimester, Forrester Research called Shopify the leader in B2B commerce tools, citing rapid product development and artificial intelligence features as key strengths.

Collectively, the wholesale and retail e-commerce markets will grow 18.9% annually through 2030. But Shopify’s sales growth should exceed the industry average. Its ability to simplify commerce is a compelling value proposition for companies of all sizes, and the company has proven to be able to deepen its relationship with merchants over time.

Shopify looked strong in the second quarter

Shopify reported strong financial results in the second quarter. Gross merchandise volume (GMV) increased 22% to $67 billion and revenue increased 21% to $2 billion. But revenue rose 25%, excluding the impact of the logistics business, which Shopify sold in the second quarter of last year. Meanwhile, non-GAAP (generally accepted accounting principles) net income rose 85% to $0.26 per diluted share.

Management highlighted strong momentum in wholesale, physical retail and international trade, three growth vectors where the company has made a concerted effort to gain share. Specifically, wholesale GMV doubled, offline GMV increased by 27%, and the number of international merchants on the platform increased by 30% in the second quarter.

Looking ahead, Shopify still has a lot of room to grow its business. The company has captured less than 2% of its addressable market, which it values ​​at $404 billion. Additionally, management believes the opportunity will grow to $849 billion as the company expands into new geographies.

How Shopify Can Become a Trillion Dollar Company Before 2040

Wall Street expects Shopify’s revenue to grow 21% annually through 2027. This is plausible, given that global e-commerce sales will grow 18.9% annually through 2030. Assuming that revenue growth will gradually slow, Shopify’s top line could accelerate as quickly as possible. 16% annually over the next 15 years.

In that scenario, the company’s trailing-12-month revenue would reach $71.9 billion after the quarter ending in June 2039. At that point, if the stock trades at 14 times sales, a discount to its three-year average of 15, 4x the sales, Shopify. would be worth $1 trillion. This implies annual shareholder returns of 16.5% over the next 15 years.

However, the stock would still focus on 11.2% annually, even if Shopify were only worth $500 billion by 2039. Returns above 11% would almost certainly beat the benchmark. S&P 500. In other words, even if my $1 trillion prediction is 50% too high, Shopify shareholders could still see market returns over the next 15 years.