Should You Forget Apple? Why You Might Want to Buy This Unstoppable Growth Stock Instead.

The past few years have been very rewarding ones for patient Apple (NASDAQ: AAPL) shareholders. The stock's up more than 300% since its early 2022 pandemic-prompted low, and higher to the tune of 700% for the past decade. Credit the iPhone and Apple's app store for most of this gain.

The thing is, revenue hasn't really budged much since early 2023. And had it not been for the ongoing growth of its services arm, it might have even slumped. The stock's been climbing anyway, largely on expectations that Apple's foray into the artificial intelligence arena will pay off.

Maybe it will. Given all the company's risks and challenges, however, perhaps it would be wiser to steer clear of frothily priced Apple shares at this time and instead dive into something with more promising upside. E-commerce technology and service provider Shopify (NYSE: SHOP) fits the bill nicely.

Why not Apple?

Don't misunderstand. Apple is far from being doomed. At the very least, there's power in making the world's most popular smartphone. The company's still-growing services arm further bolsters the bullish case.

There's an undeniable reality that no shareholder can afford to ignore, however. That is, Apple's iPhone business is stagnant as measured by unit sales as well as by revenue.

Sales of the iPhone vary throughout the average year. Demand perks up when updated models are launched in September, and then outright soars in the fourth calendar quarter thanks to holiday gift-giving and a full fiscal quarter's worth of buying. Its iPhone business is so erratic, in fact, that it's difficult to determine whether or not this business is actually growing. The graphic below helps in this regard, by virtue of plotting the iPhone's four-quarter average revenue and unit sales. As the image makes clear, Apple's smartphone business has indeed been stagnant since early 2022.

Data source: Apple Inc. and IDC. Chart by author. Revenue is in millions. Unit deliveries are in millions.

It's not necessarily disastrous. Again, this is Apple. It's one of the world's very biggest companies for good reason.

Given that the iPhone still accounts for around half of Apple's revenue, though, this stagnation is nothing to ignore. At some point, Apple will need to start driving some measurable and meaningful top-line growth.

Newer AI-capable iPhones could help, but there's no guarantee they will make a major bullish dent. After all, online tools comparable to Apple Intelligence are available to users of other brands of smartphones, even if the artificial intelligence work being done isn't handled directly from these other devices.

Why Shopify?

So what does Shopify have that Apple doesn't? Real growth -- right now, and for the foreseeable future.

If you're not familiar with it, Shopify helps merchants build their own e-commerce websites. From online shopping carts to payment processing to internet marketing to customer management tools, Shopify's suite of solutions means it's a turn-key option for almost any kind of business.

Businesses are using these tools, to be sure. The company's tech facilitated the sale of $67.2 billion worth of goods and services during the three-month stretch ending in June, up 22% year over year. Indeed, the company's been growing at such a pace for several years now, and is expected to continue doing so for at least the next several more.

Data source: StockAnalysis.com. Chart by author.

This bullish outlook, however, may still ultimately understate what's in store in terms of growth, as well as this growth's longevity.

Simply put, the e-commerce industry isn't just growing. It's also evolving. While online malls like Amazon and eBay served their initial purpose well enough, many merchants and manufacturers are now better served by doing their own thing, directly cultivating relationships with customers instead of using online middlemen that could wreck or commandeer these relationships in the future.

That's only half the bullish argument, however. The other half is how much growth awaits the entirety of the e-commerce industry. As of its latest look, the Census Bureau reports that only about 16% of the United States' retail sales -- where Shopify does most of its business -- are done online. The other 84% is still done in-store, leaving it up for grabs. The key is simply making the right appeal to these shoppers, shifting them from an offline to an online venue.

To this end, market research outfit Precedence Research believes the worldwide e-commerce industry is poised to grow at an average annual pace of just under 15% through 2034, with that growth led by the established direct-to-consumer brands that have the most to gain by building their own online presence.

The kicker: Unlike Apple's stock, which is just coming off yet another record high, Shopify shares are still well below their late-2021 peak, despite their big gain from 2022's low.

If nothing else, be pragmatic

This won't always be the case. There will come a time when Apple is a must-own stock again, just as there will come a time when Shopify shares pose too much risk for their prospective reward.

That time isn't now, though. Right now -- thanks to recent but unsupported bullishness -- Apple is arguably one of the market's most overvalued tickers, while Shopify is one of its most underestimated names. Take advantage of this opportunity while you can, and perhaps more importantly, don't insist on owning the world's most popular stocks just because they're popular. Nothing lasts forever, for better and worse.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, and Shopify. The Motley Fool recommends eBay. The Motley Fool has a disclosure policy.