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When looking for growth stocks to invest in, it’s imperative that those picks have market-beating potential. Otherwise, you’re just taking on massive risk for little reward. You’d be better off just investing in a broad market index fund. However, if you can choose the right stocks, then there’s a chance you could build generational wealth. In this article, I’ll discuss one stock that has market-beating potential.
Which stock would I choose to beat the market?
If I could only choose one stock to beat the market, I would go with Shopify (TSX:SHOP). For those who are unfamiliar with this company, Shopify provides merchants of all sizes with a platform and many of the tools necessary to operate online stores. However, with more than one million merchants around the world relying on Shopify’s platform, I doubt that many of today’s readers would be unfamiliar with this company.
In my opinion, what separates Shopify from its competitors is the fact that it can cater to any business. This includes first-time entrepreneurs and large-cap enterprises. In fact, Netflix made headlines in recent years when it announced that it had chosen Shopify to power its official online store.
Shopify is also very impressive because of its massive enterprise partnership network. By teaming up with the likes of Spotify, Meta Platforms, and many more A-list companies, Shopify puts its merchants in front of customers like no other e-commerce company.
Shopify is also an innovator. It made headlines when it announced that Shopify stores would be able to accept cryptocurrencies on the platform. That opened up a new stream of revenue and attracted more customers and merchants to its platform.
The company is always looking for new ways to reach the eyes of consumers. For instance, consider its presence in the e-sports scene. This is an area that has a lot of room to grow and is very attractive to younger generations. Shopify has been fielding teams in massive e-sports such as Valorant, Starcraft, Dota2, Halo, and Rocket League. Last week, the company announced that it would enter the League of Legends scene, competing in the League Championship Series.
How has Shopify stock looked recently?
For much of its history, Shopify has impressed investors with its outstanding growth rate. In 2020, Shopify was listed as the highest-performing stock on the TSX over the past three years. At the time of that announcement, Shopify’s three-year stock performance was so great that it nearly accounted for the performance of the next three highest-ranked stocks combined.
Unfortunately, not every year will come in so impressive. Some years, like in 2022 will occur every so often. Starting in mid-November 2021, Shopify would go on to lose more than 80% of its value over a one-year period. However, since hitting its lowest point in recent years, Shopify stock has started to recover. Over the past year, this stock has gained more than 80%. Compare that to the performance of the TSX, which has gained under 5% over the same period.
Although Shopify stock currently sits much lower than its all-time high, I believe this stock has all it needs to continue growing over the coming years.