Online Retail ETFs Plunge After Shopify Earnings

The e-commerce software developer is projecting slowing growth in Q2.

Senior ETF Analyst
Reviewed by: Staff
Edited by: James Rubin

E-commerce exchange-traded funds tumbled on Wednesday as shares of Shopify plunged by nearly 20%. 

The developer of software for running online stores said that its expenses will rise in the second quarter, while its revenue growth will decelerate.

Ottawa-based Shopify has a market capitalization of $80 billion, making it one of the world’s largest e-commerce companies.

The stock has substantial weightings in funds like the First Trust Dow Jones International Internet ETF (FDNI), the ARK Fintech Innovation ETF (ARKF), the Global X Cloud Computing ETF (CLOU), and the Global X E-Commerce ETF (EBIZ).

Shopify reported healthy earnings for the first quarter. Merchants using the company’s platform sold $60.9 billion worth of goods and services, generating $1.9 billion of revenues for Shopify. Both figures were up 23% from a year ago. 

However, Shopify said that its second quarter revenue growth rate would slow to “a high-teens percentage rate,” disappointing investors. 

The firm also forecast that operating expenses in second quarter would rise by a “low-to-mid-single digit percentage rate compared to Q1 2024.” 
Analysts at Baird said that Shopify’s higher operating expense guidance overshadows “an otherwise solid report.” 
They said that the company is “probably leaning into marketing and R&D (AI/GenAI) investments,” but “without a clear positive impact on [gross merchandise value] and revenues from recent investments, investors will question the margin trajectory.” 

E-Commerce Soars

Shopify’s drop on Wednesday was a black eye for the e-commerce industry, but it did little to dent the strong performance for e-commerce stocks as a whole this year. 

 EBIZ is still up 13.1% year-to-date, while the ProShares Online Retail ETF (ONLN) is up by 12.3%. 

U.S. e-commerce sales in 2023 rose by 7.6%, outpacing the 2.1% gain for retail sales broadly, according to the Census Bureau. 

Globally, e-commerce sales grew a faster 10% and are expected to grow another 9% this year. 

According to Shopify’s Global Ecommerce Sales Growth Report, online sales are expected to “continue rising and take a larger piece of the retail pie.” 
“In 2025, global ecommerce sales are forecast to rise to $6.86 trillion, before adding another $550 billion in 2026, to $7.41 trillion. By 2027, it’s estimated that world retail ecommerce sales will hit $7.96 trillion,” according to the report.

Sumit Roy is the senior ETF analyst for, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for, with a particular focus on stock and bond exchange-traded funds.

He is the host of’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays,’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.