We recently compiled a list of the 10 Most Volatile Stocks To Buy Right Now. In this article, we are going to take a look at where Shopify (NASDAQ:SHOP) stands against the other volatile stocks.

Impact of Geopolitics on Investor Psyche and Investment Planning

In an interview on Bloomberg on October 2, Jimmy Chang, CIO at Rockefeller Global Family Office, shared his insights on how geopolitical events, such as the recent conflict between Iran and Israel, affect the investor psyche and investment planning. Chang emphasized the importance of separating noise from signals, noting that markets have been conditioned to react temporarily to such events, only to return to normal once the situation is controlled. He predicted that the market would likely move past the current conflict unless there is further escalation.

Chang also discussed the cumulative effect of various conflicts and geopolitical disruptions, including the Ukraine-Russia war and the changing of the guard in terms of presidential elections. He noted that the US election is a bigger catalyst in the near term, with a potential Trump victory being more disruptive to foreign policies, particularly regarding the war in Ukraine and support for Israel. Chang also highlighted the impact of the US market's inward focus, with investors tending to dismiss overseas events, despite the potential for emerging markets to outperform.

Regarding the US election, Chang noted that his clients are interested in the outcome but have a long-term view, which has not altered their strategic allocation. However, tactically, they may play out different scenarios, such as a blue sweep, which could be viewed as negative for equities and positive for bonds, or a Trump victory, which could be more inflationary and positive for equities. Chang also discussed the potential for tailwinds, such as interest rates coming down and an economy doing better than expected, to outweigh any potential negatives from the election.

Chang expressed concerns about other risks, such as the port and Boeing strikes, which could have significant economic consequences if they drag on. He noted that these events could disrupt the market's complacency about the interest rate-cutting cycle and potentially lead to inflation coming back. Despite these risks, Chang does not believe that the latest headlines are enough to derail the bull market, predicting a potential 5% pullback before the focus shifts to earnings season and the elections.

Overall, Chang's comments provide insight into how investors navigate the complex geopolitical landscape and the potential impact of the US election on markets. While there are risks and uncertainties, investors are optimistic about the market's ability to move past these events and continue expansion. With that in context, let’s take a look at the 10 most volatile stocks to buy right now.

Our Methodology

To compile our list of the 10 most volatile stocks to buy right now, we used the Finviz and Yahoo stock screeners to find the largest companies with a beta of more than 2.  We then narrowed our choices to 10 stocks according to their hedge fund sentiment, which was taken from our database of 912 elite hedge funds as of Q2 of 2024. The list is sorted in ascending order of their hedge fund sentiment, as of the second quarter.

Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

An enthusiastic customer completing a purchase and receiving an order confirmation via one of the companies online sales channels.

Shopify (NASDAQ:SHOP)  

Number of Hedge Fund Investors: 56  

Beta: 2.36

Shopify (NASDAQ:SHOP) is a leading e-commerce platform that enables businesses to set up and manage online stores with a user-friendly interface and a suite of powerful tools. The company empowers entrepreneurs to build their brands and sell products effectively.

One of the key drivers of Shopify’s (NASDAQ:SHOP) growth is its lending program, Shopify Capital, which has already extended $5.1 billion in credit to merchants. This program is potentially disrupting traditional banks and venture funds by offering loans to merchant revenue, which allows the company to tap into a large and growing market of providing loans to small and medium-sized businesses that are often underserved by traditional banks.

Shopify (NASDAQ:SHOP) loans have an APR range between 32% and 45%. This high-yielding loan portfolio provides the company with a significant source of revenue and profit, which can be used to fuel further growth and expansion. By packaging the loans into securities and selling them to investors, Shopify (NASDAQ:SHOP) can also free up capital to invest in other areas of the business.

Alternatively, Shopify (NASDAQ:SHOP) can hold the loans for returns on idle capital. With APRs ranging between 32% and 45%, Shopify (NASDAQ:SHOP) can generate significant returns on its investment, which can be used to fuel further growth and expansion.

Shopify's (NASDAQ:SHOP) unique business model, combined with its highly profitable lending program, makes it an attractive investment opportunity for those looking for growth and income.

Overall SHOP ranks 6th on our list of the most volatile stocks to buy. While we acknowledge the potential of SHOP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SHOP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.