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In becoming a rising force in global e-commerce, Shopify Inc.’s stock has caught fire, and on Tuesday the company passed venerable BCE Inc. in stock market value.

The Canadian software company’s shares are up by 164 per cent so far this year, trouncing all the U.S. internet behemoths and capturing the attention of the market’s biggest growth and tech investors.

Already larger than some better-known American peers, including eBay Inc., Shopify’s scorching rally has also vaulted it into the ranks of Canadian corporate elite.

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Its $56.2-billion market capitalization makes it the country’s 10th largest public listing, surpassing media and telecom giant BCE and closing just shy of $500 a share on Tuesday.

“I think people are starting to get the disruption now,” said Ron Shuttleworth, a partner at Toronto-based Oak Hill Financial and a veteran of the Canadian tech sector.

“They’re not trying to be a retailer like Amazon or eBay. These guys are retail enablers. I just hope they can maintain the momentum.”

If the company can’t maintain its torrid pace of expansion, shareholders could be forced to endure a painful reckoning. Like many fallen growth names before it, Shopify’s sky-high valuation could make for a long drop if fortunes change. The company trades at more than 20 times next year’s revenue estimate and has yet to report an annual profit.

For more than 800,000 internet merchants, however, Shopify has become the platform of choice to sell everything from socks to coffee.

“It’s the democratization of e-commerce,” Mr. Shuttleworth said. “You strap on this little e-commerce engine, and you’re off to the races.”

The company has been steadily adding new features to its core offering, including an integrated credit-card payment processor that last year expanded to a number of countries such as Japan and Germany, and most recently, a fulfilment network, giving its clients shipping and warehousing capabilities.

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While still dwarfed by the likes of Amazon.com Inc., Shopify’s rapid growth in market share and revenues show no sign of slowing.

“Shopify is capturing more of the e-commerce opportunity, in domestic and international markets,” RBC Dominion Securities analyst Paul Treiber said in a recent note.

Last year, the company’s sales exceeded US$1-billion for the first time. Now, Shopify is on track to double that top line by next year.

Despite Shopify’s lack of profit, many investors are willing to pay for growth over earnings.

Many other prominent internet companies spent years putting up red ink for the sake of building market share.

“For people that missed the rise of Amazon or Google, this looks like one of those opportunities,” said Jeff Parent, chief investment officer at Castlemoore Inc., which owns shares of Shopify.

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“There’s a lot of enthusiasm,” he said.

Meanwhile, the enthusiasm for the FAANG stocks – Facebook Inc., Amazon, Apple Inc., Netflix Inc. and Google-parent Alphabet Inc. – has waned somewhat.

As a group, those stocks are trading about 16 per cent below their 2018 peak, forcing many tech and growth investors to broaden their horizons.

As more investors get on board, Shopify’s valuation makes it one of the most expensive cloud-based stocks on the market.

“You’re paying for the next six to eight years of tremendous growth right now,” said John Zechner, president of wealth management company J. Zechner Associates.

“If you go long the stock, you’d better hope they don’t have any disappointments along the way.”

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Editor’s note: The company's payments service was initially launched in 2013, and was expanded last year to a number of countries, including Japan and Germany. An earlier version suggested the entire service started last year.
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