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Investors who bought Amazon (NASDAQ:AMZN) stock at the end of 2007 have watched their shares climb over 50-fold since then. It's natural to ask what e-commerce company could do something similar next.
With its stock near a record, Shopify (NASDAQ:SHOP) is a clear candidate. Shares of the e-commerce software company closed at a record $179.22 earlier this week, and they trade around $170 as I write.
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And on size alone, the comparison works surprisingly well. Shopify's revenue for the last 12 months was about $13.3 billion. Amazon's revenue in 2007 was $14.8 billion.
But Shopify isn't built the way Amazon was, and its stock isn't valued the way Amazon's was in 2007. For anybody buying shares today, I think the second difference matters most.
Amazon's 2007 was a strong year. Its revenue climbed 39%, and its free cash flow, or the cash Amazon had left after paying for capital spending, more than doubled to $1.18 billion, crossing $1 billion for the first time.
Shopify's growth looks similar, and it's been accelerating. Showing how much faster merchants are selling through the platform, Shopify's gross merchandise volume (GMV, the total value of orders placed through Shopify) grew 20% in 2023, 24% in 2024, and 29% in 2025. It's also cleared 30% year over year in each of the last four quarters. In the second quarter of 2026, GMV rose 32% year over year to around $116 billion, after 35% growth in the first quarter, and revenue climbed 34%.
Shopify's already ahead on cash. Its free cash flow for the last 12 months came to around $2.4 billion, up about 29% from the year-ago period -- and about twice Amazon's 2007 number, on a bit less revenue. That's a free cash flow margin of around 18%, against about 8% for Amazon in 2007.
Put another way, judged by free cash flow, Shopify's business arguably looks stronger now than Amazon's did at the same size.
This cash gap comes from a core difference between the two companies. Amazon in 2007 was mainly a retailer. Products sold by outside sellers were just 28% of the units sold on its sites that year, so most of its revenue was the full price of goods Amazon sold itself.
Shopify doesn't sell the products. Its merchants do. Shopify charges them for its software, and its merchant solutions business, which brings in around three-quarters of revenue, earns most of its money from processing their payments.
In the last 12 months, Shopify's GMV came to about $432 billion, and the company's revenue was just about 3% of that. Also, the share it handles directly keeps growing. Shopify Payments processed 68% of GMV in the second quarter, up from 64% in the year-ago period.
That's a key reason Shopify's margins look more like a software company's than a retailer's. But it also means Shopify's revenue rises and falls with how much its merchants sell and how big a cut of every sale it takes.
At the end of 2007, Amazon's market value was almost $39 billion, or around 33 times that year's free cash flow. Shopify's market value is about $218 billion now, or about 92 times the free cash flow it produced in the last 12 months. In other words, buyers today pay almost three times as much per dollar of Shopify's free cash flow as investors paid for Amazon's back then.
That matters because Amazon's investors had years of compounding without paying for much of it up front. Shopify could keep growing quickly and still deliver far more ordinary returns, since so much of that growth is probably already in the stock price.
Sure, Shopify's growth could stay above 30% longer than seems likely now. But even then, the stock could need years of that growth just to grow into its current valuation.
I think the business has a good chance of becoming one of e-commerce's great long-term compounders. But at today's price, buyers are paying for much of that compounding in advance, so I'd expect far less from the stock than Amazon delivered after 2007.
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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Shopify. The Motley Fool has a disclosure policy.
Could Shopify Stock Repeat Amazon's Run Since 2007? was originally published by The Motley Fool
