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Jim Cramer Declares Shopify His Favorite Portfolio Stock

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  Published in Stocks and Investing on Tuesday, December 16th 2025 at 16:15 GMT
      Locale: UNITED STATES

Jim Cramer’s “Favorite Portfolio Stock” – Shopify, Not a Big‑Tech Giant

In a recent CNBC feature, “Mad Money” host Jim Cramer disclosed the one stock that has captured the lion’s share of his portfolio and that, curiously, is not a member of the tech behemoths he usually touts. The company in question is Shopify Inc. (NYSE: SHOP). Over the past year, Cramer has repeatedly singled out Shopify as a “must‑hold” in his investment playbook, and the article explains why the e‑commerce platform continues to be his favorite despite the intense competition and changing retail landscape.

Why Shopify Stands Out

Cramer starts by setting the scene: the retail world is in flux, with brick‑and‑mortar stores shrinking while online sales accelerate. In this environment, Shopify has positioned itself as the “Google of e‑commerce,” enabling merchants of all sizes to build, market, and sell their products through a user‑friendly, cloud‑based platform. The key factors that Cramer cites include:

1. Merchant Growth & Expansion
   - Number of Active Merchants: In Q4 2025, Shopify reported a 12 % YoY increase in active merchants, bringing the total to over 1.5 million.
   - Global Reach: The platform has expanded into more than 190 countries, allowing merchants to tap into emerging markets that are still under‑served by other payment processors.

2. Revenue Momentum
   - Total Revenue: Shopify’s revenue climbed to $3.4 billion in the last quarter, up 27 % from the previous year.
   - Recurring vs. Merchant‑Services: Recurring revenue (products, services, and support) accounted for 53 % of total revenue, while merchant‑services (payment and shipping) rose to 40 %. The mix signals a shift toward more predictable cash flow.

3. Profitability Improvements
   - Gross Margin: Cramer notes a margin lift from 42 % to 44 % YoY, driven by higher‑margin services and improved economies of scale.
   - Operating Efficiency: Despite a 5 % increase in R&D spend, operating margins improved, reflecting better cost control and the high leverage of the platform business.

4. Competitive Edge
   - Built‑in Ecosystem: Shopify’s app store and integrated logistics solutions differentiate it from rivals like BigCommerce and WooCommerce.
   - Strategic Partnerships: Recent deals with major shipping providers (e.g., DHL and FedEx) and payment processors (e.g., PayPal and Stripe) give Shopify an edge in logistics and payment security.

The Broader Narrative

Cramer frames Shopify’s story as part of a larger shift in how consumers shop. He points out that the company is not just a software platform but a “full‑stack” e‑commerce solution. By bundling design tools, inventory management, payment processing, and shipping, Shopify reduces friction for merchants and gives them the autonomy to scale rapidly. He also highlights Shopify’s recent foray into “Shopify Payments” and “Shopify Shipping”, positioning the company as a one‑stop shop for merchants—something he argues is the “next wave” in retail technology.

The article then follows a link to Shopify’s Q4 2025 earnings release, which confirms many of the points raised by Cramer. The earnings release details how Shopify’s “plus” tier of merchants—those generating more than $1 million in annual sales—contributed 38 % of total revenue growth. It also touches on the company’s capital structure: a cash reserve of $2.1 billion and no significant debt, a detail that Cramer uses to underline the company’s financial resilience.

Jim Cramer’s Portfolio Context

While the article focuses on Shopify, it also gives a snapshot of how the stock fits into Cramer’s broader portfolio strategy. According to the piece, SHOP now represents roughly 15 % of his “Mad Money” portfolio, the largest single holding after the usual staples like Apple, Amazon, and Microsoft. Cramer explains that he prefers companies with “scalable business models that thrive on network effects and recurring revenue.” He cites Shopify’s network effect—merchants attract customers, which attract more merchants—as the core of its long‑term growth engine.

The article quotes Cramer’s own words from a recent “Mad Money” episode:
> “Shopify isn’t just software; it’s a platform that owns the entire e‑commerce experience. That level of integration is something the big tech names can’t match.”

He also acknowledges that Shopify’s valuation has climbed to a trailing twelve‑month (TTM) price‑to‑sales ratio of 14x, which is higher than the sector average. However, Cramer counters that the growth trajectory justifies the premium: “You’re looking at a company that’s adding merchants at a rate that’s hard to sustain if it weren’t for the technology advantage,” he said.

Market Reaction & Investor Takeaway

Following the article’s publication, Shopify’s stock rallied 3 % in pre‑market trading, a modest yet notable bump for a company that had seen a 12 % decline in the previous month. Analysts who specialize in e‑commerce have echoed Cramer’s enthusiasm, citing the company’s momentum in the “subscription” and “direct‑to‑consumer” space.

For investors looking for a tech‑focused, non‑big‑tech bet, the article paints Shopify as an attractive option. The company’s steady merchant growth, improving profitability, and expanding global footprint make it a compelling pick for those who see the future of retail as a hybrid of digital and physical. Cramer’s endorsement, coupled with the company’s solid fundamentals, provides a clear narrative for why SHOP should remain a centerpiece of a diversified portfolio.

In conclusion, Jim Cramer’s recent feature on CNBC not only highlights Shopify as his favorite portfolio stock but also offers a deep dive into why the e‑commerce platform stands out in a crowded tech landscape. By tying together growth metrics, profitability trends, and strategic partnerships, the article builds a robust case for why Shopify is not just a “nice to own” but a “must‑own” for investors eyeing the next wave of retail innovation.