Why Shopify Stock Climbed to a New All-Time High Today
What happened
Shares of Shopify (NYSE: SHOP) rose 6.4% to a record closing high of $1,134.32 on Tuesday after its e-commerce partner, Walmart (NYSE: WMT), announced the launch date of its eagerly anticipated membership service.
So what
Walmart+ will provide members with a range of benefits, such as savings on gasoline and the ability to use Walmart's new contactless payment solutions in its stores. But it's the service's free delivery benefits that could be particularly valuable to members -- and they're specifically designed to help Walmart gain ground on its arch-nemesis, Amazon.com (NASDAQ: AMZN), in the online retail arena.
Investors think Shopify will profit from Walmart's membership initiatives. Image source: Getty Images.
Shopify stands to benefit if Walmart+ is a success. The online retail platform partnered with Walmart in June. As part of the deal, a select group of Shopify's merchants was allowed to list their products on a special section of Walmart.com. The partnership was meant to bolster Walmart's third-party marketplace -- an area where Amazon has long had a sizable advantage.
Now what
If Walmart+ and its free delivery options boost sales on Walmart.com, Shopify's merchants -- and, by extension, Shopify itself -- are likely to enjoy higher sales and profits. Investors, in turn, bid up Shopify's shares in anticipation of even stronger potential growth for the online retail star.
More From The Motley Fool
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Shopify and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.
Why Shopify Stock Climbed to a New All-Time High Today was originally published by The Motley Fool
