David George-Cosh

Reporter

Follow|Archive

Famed stock picker Cathie Wood said Shopify Inc. may one day be as big as online retail giant Amazon.com Inc. 

The Canadian tech darling appears better positioned to take a leading role in social e-commerce sales as more people turn to platforms like Instagram and Twitter to make their purchases, Wood said.  

Wood, founder and chief executive officer of Ark Investment Management LLC, told BNN Bloomberg in an interview that Shopify remains one of the top 10 investments in the firm's flagship fund and is poised to be the social e-commerce leader in what she described as an "explosive space". 

"We're trying to figure out how Amazon is going to deal with this notion of individuals seeing something on Instagram or elsewhere on Facebook or on Twitter, or on Snap and just buying there," Wood said. "That's a Shopify-enabled commerce opportunity and we think it's going to be big." 

U.S. social e-commerce sales are forecast to rise by 34.8 per cent to US$36.09 billion this year and should account for about four per cent of all online retail, according to industry data tracker eMarketer. 

Interest in Shopify has also soared over the past year as the company helped to facilitate online retail storefronts for many of the world's brick-and-mortar retailers that were forced to shut their doors due to the COVID-19 pandemic. That demand has led Shopify's stock to more than double over the past year and is currently Canada's most valuable company by market capitalization. 

While Shopify's rise may make it too pricey for some investors, Wood believes that the Ottawa-based tech giant can still grow as big as Amazon, given the long-term opportunities in the social e-commerce space. 

"We know Shopify is a very expensive stock but because of these viral networking opportunities around commerce, we think it's the most exciting one probably out there," Wood said. 

"Shopify doesn't care who wins. It's going to be involved with many, if not most, of all of the sites that are going to be powering up commerce."

Wood also reiterated her call for bitcoin prices to climb north of $500,000 once institutional investors buy into the cryptocurrency and diversify some of their cash holdings into the popular asset. 

While Wood declined to provide a price target for online cryptocurrency platform Coinbase Inc., which began trading on the Nasdaq exchange via a direct listing on Wednesday, she is optimistic the company will meet Ark's minimum threshold of a 15 per cent annual return. 

"Right now, [Coinbase] is making about 70 basis points on each dollar traded, and we think there will be fee compression as there always is in the institutional world as competition increases," Wood said. 

"I think the opportunities in this stock, to the extent there are dips out there, will come around the idea of 'Oh, my goodness, how much is competition going to drive these fees down?'"