Down 25%, Is Shopify Stock a Better Buy than SpaceX and the "Magnificent Seven" Stocks in September?

Shopify generated $6.7 billion of first-half 2026 revenue, up 34% year over year, while net income rose to $921 million from $224 million. However, the article argues its approximately 69-70x forward P/E and 89x trailing earnings multiple leave limited valuation support despite projected 32% growth in 2026 and 26% in 2027. It favors Alphabet at 17x earnings, citing 24% first-half revenue growth, Gemini AI momentum, and 82% latest-quarter Google Cloud revenue growth.

Analysis

The relevant setup is not simply growth versus value: SHOP’s multiple embeds sustained merchant-GMV outperformance, continued payments/merchant-services attach expansion, and limited AI-driven price competition simultaneously. Agentic commerce is a two-sided risk over the next 6-18 months: it can lower merchant acquisition and support costs, but it also reduces the differentiation of storefront creation and may shift discovery power toward Google, marketplaces, and AI assistants. That makes SHOP’s incremental gross-profit pool more dependent on payments penetration and enterprise wins than on subscription growth alone.

GOOGL offers a cleaner earnings-revision path over the next 1-3 quarters if Cloud growth converts into operating-margin leverage rather than merely AI infrastructure spend. The market may be underpricing the option value of distributing AI across Search, Workspace, and Cloud while valuing the core business on a mature-advertising multiple. The key second-order issue is that enterprise AI workloads favor hyperscalers with proprietary chips, distribution, and bundled security; this can pressure smaller software vendors’ pricing while expanding GOOGL’s share of customer IT budgets.

Preferred expression is long GOOGL / short SHOP rather than a directional call: it isolates the valuation and AI-monetization dispersion while reducing broad mega-cap duration exposure. Do not infer anything investable from SPCX: SpaceX is not publicly listed, and a quoted public-equity valuation comparison is not a usable trading input. The pair is vulnerable if SHOP demonstrates accelerating merchant-services take rate or if Google’s AI answers materially cannibalize high-value search queries before Cloud profit contribution is visible.

Key Decisions for Investors

• Initiate a 3-6 month beta-adjusted long GOOGL / short SHOP pair, beginning at half size and adding after the next earnings prints. Target 15-20% relative return; exit if SHOP delivers two quarters of accelerating gross-profit growth with stable operating margins, or if GOOGL guides to materially higher AI capex without corresponding Cloud margin expansion.
• For long-only exposure, rotate SHOP allocation into GOOGL ahead of the next quarterly results; GOOGL’s catalyst is upward consensus EPS revision from Cloud and AI product monetization, while SHOP requires execution above an already demanding expectation set.
• Monitor SHOP payments penetration, merchant-solutions gross margin, enterprise merchant additions, and AI-driven customer-acquisition costs over the next two quarters. A rising take rate and improving contribution margins would invalidate the short leg even if headline revenue growth moderates.
• Avoid using SPCX as a listed-equity trade proxy. If seeking private-space exposure, treat it as a separate private-markets diligence item rather than a valuation anchor for public software or internet positions.