Shares of Shopify Inc. (NYSE:SHOP) were rising today on no company-specific news. Instead, it appears that investors were reacting to positive quarterly results that another major e-commerce player, Amazon, reported yesterday.
Shopify’s share price had gained 8.9% as of 2:11 p.m. ET.
Many tech stocks were performing well today after Amazon beat analysts’ consensus estimate for earnings in the company’s fourth quarter. The e-commerce-giant’s adjusted earnings per share were $5.80 for the quarter, blowing past Wall Street’s expectation of $3.57 per share.
Amazon’s strong earnings boosted investors’ confidence in the tech sector, which has been hurt over the past several weeks as investors are processing the idea that the Federal Reserve will likely raise interest rates several times this year. Additionally, rising inflation has put many investors on edge, and some of them have moved out of high-growth and riskier tech stocks.
But Amazon’s strong earnings in the fourth quarter seemed to encourage some investors to come back to the sector. And with Amazon and Shopify both in the e-commerce space, Shopify investors may have been especially optimistic after Amazon’s results.
Shopify’s stock hasn’t weathered investors’ concerns about inflation and interest rates very well over the past month. Even with today’s share-price pop, the stock is down 35% over the past four weeks.
Shopify investors will get a clearer picture of how the company is doing when it reports fourth-quarter results on Feb. 16. Until then, long-term investors should remember that the current volatility in the market, and particularly with tech stocks, shouldn’t be a reason on its own to change their original investing theses for Shopify.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
Read More: Why Shopify Stock Is Climbing Today