Shopify Stock’s Correction Is a Gift to Investors for the Holidays

Shopify (TSX:SHOP)(NYSE:SHOP) is one of many Canadian tech stocks that growth investors should think about buying before 2022 arrives.

| More on:
Beautiful holiday decorated background with christmas gift boxes ,fir. christmas holiday concept

Image source: Getty Images

Shopify (TSX:SHOP)(NYSE:SHOP) stock plunged a nasty 3.5% on Monday, bringing shares down nearly 17% from all-time highs. Indeed, Mr. Market has not been kind to some of this market’s high flyers. The higher the multiple or the greater the growth prospects, the more punishment he dealt to momentum-chasing investors who got in at the wrong time. Undoubtedly, Shopify stock will always be on the receiving end of most growth-focused sector rotations or selloffs.

As Canada’s top tech stock, there will also be a bit of jitters, as many past Canadian firms with the largest market caps have endured vicious corrections. Whether or not a Canadian bank regains the lead over Shopify is anyone’s guess. Regardless, a handful of skeptical pundits who view market valuations as bubbly will likely not be tempted to buy the dips in many of the fastest-growing tech stocks now that they’re in reversal mode.

Shopify stock: Magnificent managers that know how to get things done

Personally, I think the recent correction in Shopify stock is less remarkable in the grander scheme of things. If anything, it’s a gift courtesy of Mr. Market just in time for the holiday season. Shopify has always been expensive, and even short-sellers have been unable to keep it down for very long.

Why? The e-commerce firm doesn’t just have a great management team; it has a legendary founder in Tobias Lütke at the helm. As you may know, I’m a massive fan of the man’s stewardship. As long as he’s top boss, I think Shopify has room to run, as it looks to become Canada’s first trillion-dollar company. Although the milestone seems far-fetched or out of reach, I think it’s just a matter of time, given all the traits that Shopify shares with the greatest American tech companies that continue to lead the broader indices higher, even under the most unprecedented conditions.

With Shopify trading at just south of $1,800 per share, there are a handful of reasons to punch your ticket on the latest dip, with a bear close to rearing its ugly head yet again.

Shopify: The growth is unlikely to stall anytime soon

How can a firm as mature as Shopify continue raising the bar on itself? Although the company came up short for the first time in a long time, its stock surprisingly held up. Undoubtedly, many Canadian investors are still hungry for next-level growth. And Shopify is able to continue delivering on that front, as it looks to upsell customers with new value-adding offerings while continuing to go after a total addressable market (TAM) in its corner of e-commerce.

It’s hard to imagine that Shopify still has room to run in the SMB (small- and medium-sized business) space. But it does, and it’s going to continue spreading its wings, beckoning in new customers with a growing line-up of intuitive, innovative offerings. Shopify Payments is just one of many intriguing growth levers that Lütke and his team can pull to build on Shopify’s strengths coming out of a historic year.

With Omicron spreading rapidly, one must also not discount the potential for more lockdowns and a reinvigoration of e-commerce sales. While pandemic tailwinds enjoyed in 2020 are unlikely to return, investors, I believe, should get aggressive with Shopify stock here, as year-over-year comparables become that much more favourable.

Today, Shopify is a $225 billion company. At this pace, though, expect Shopify to crack the $1 trillion mark at some point over the next seven to 10 years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool owns and recommends Shopify.

More on Tech Stocks

A data center engineer works on a laptop at a server farm.
Tech Stocks

Psst … 2 Tech Stocks I’d Buy Before Shopify

Shopify (TSX:SHOP) stock is great -- don't get me wrong. But these two tech stocks are great too, with more…

Read more »

Technology, internet and networking, security concept
Tech Stocks

1 Top Canadian Cybersecurity Firm on the Frontline Against Cyber Threats

Here’s the best Canadian cybersecurity stock you can buy now to benefit from the expected significant surge in demand for…

Read more »

Credit card, online shopping, retail
Tech Stocks

Should You Buy Lightspeed Stock After Its Q4 Earnings?

Despite its volatility, I expect Lightspeed to outperform in the long run due to its healthy growth prospects and cheaper…

Read more »

Shopping and e-commerce
Tech Stocks

Shopify Stock: Is $100 the Next Stop?

Shopify (TSX:SHOP) stock may be headed to the $100 level over the longer term if things fall into the right…

Read more »

Young woman sat at laptop by a window
Tech Stocks

Open Text’s Cloud Kingdom: A SaaS Stock for the Long Haul?

Here's why Open Text (TSX:OTEX) could indeed be a software-as-a-service stock that long-term investors may want to consider right now.

Read more »

clock time
Tech Stocks

Is Now the Right Time to Buy Shopify Stock?

Amid another dip, Shopify stock might be worth buying right now for investors who missed the post-earnings surge.

Read more »

Tech Stocks

Is BlackBerry Stock a Buy for June 2023?

Given its multiple growth drivers, I expect the uptrend in BlackBerry’s stock price to continue.

Read more »

Index funds
Tech Stocks

1 Canadian Tech Stock I’d Buy Before Shopify Stock

Shopify stock is still a good option, but this other tech stock could be even better, especially as it's up…

Read more »