Shopify Stock: Buy Now or Wait for the Dip? 2025’s Critical Timing Question

SHOP faces its moment of truth as e-commerce evolution accelerates

The Bull Case: Riding the Digital Commerce Wave

Shopify's platform continues eating traditional retail's lunch—merchant count swelling while legacy players scramble to catch up. Their ecosystem expansion cuts out middlemen, bypasses outdated infrastructure, and positions them as the default operating system for modern commerce.

The Bear Reality: Valuation Headwinds Loom

Current multiples assume perfection while interest rate uncertainty threatens growth stocks. The stock's recent run-up leaves little margin for error—one missed quarter could trigger the dip everyone's waiting for.

Timing the Market: Fool's Game or Strategic Play?

Waiting for the perfect entry often means missing the train entirely. Meanwhile, Wall Street analysts—who somehow never see crashes coming—remain divided on short-term targets while long-term fundamentals strengthen.

Final Verdict: Stop Overthinking and Start Dollar-Cost Averaging

Shopify represents the future of commerce, not just another tech stock. The real risk isn't buying at slightly elevated prices—it's sitting on the sidelines while digital transformation accelerates. Because in finance, the only thing more predictable than market cycles is experts being wrong about them.

Image source: Getty Images.

Why Shopify could face some challenges ahead

Shopify's business has been doing well in recent periods, but there could be a slowdown coming in upcoming quarters. That's because on Aug. 29, the U.S. closed the de minimis loophole, which allowed low-priced goods to FLOW into the country without facing tariffs. With a strong global presence and many Shopify merchants selling products to U.S. customers, this policy change could put a significant dent in the number of transactions on Shopify's platform.

When Shopify last reported earnings, it was for the period ending June 30. At the time, its platform was thriving with gross merchandise volume rising by 31% to $87.8 billion for the quarter. That led to Shopify's revenue rising by a similar percentage, to $2.7 billion.

In its current quarter, investors will get an initial glimpse of how the business is doing amid the changes. But the key quarter to watch out for may be the last one of the year, where the closing of the de minimis loophole will impact the full three months, and also be amid the crucial holiday shopping season.

Its high valuation leaves no buffer for safety

Shopify faces question marks in the latter half of the year, but with a high valuation, investors shouldn't expect to have any margin of safety if they buy the stock right now. It's trading at a price-to-earnings multiple of around 82 -- far higher than theaverage of 25. The danger with buying it at its current level is that if there is a slowdown in Shopify's growth rate later this year, the stock could be vulnerable to a sell-off.

Year to date, Shopify's stock has risen by around 40% and it recently hit a new 52-week high. The last time it was trading around these levels was back in 2021. And when the company encountered a slowdown the following year, its valuation crashed by a staggering 75%.

I'd hold off on buying Shopify's stock

Shopify has a strong business and with a vast presence around the globe, it has tremendous growth opportunities to tap into over the long haul. But with a lot of uncertainty around trade and tariffs, I expect Shopify's business to slow significantly in upcoming quarters.

Although it's a good e-commerce stock to invest in for the long haul, it's always important to consider valuation when investing, to ensure you can set yourself up for a good long-term return while also providing yourself with a buffer in the event of a possible slowdown in business. If you bought Shopify's stock around its peak in 2021, you would just now be getting close to breakeven on your investment.

For now, I'd put Shopify on a watchlist as it's too highly priced given the uncertainty it faces ahead, and there are other growth stocks out there which may provide better value for investors today.