Got $6,000? Here’s How You Can Power Your TFSA Portfolio in July

Here’s why I think picking up shares of Shopify under $40 makes sense.

| More on:
TFSA and coins

Image source: Getty Images

Those looking to put their annual $6,000 TFSA contribution to work have some hard decisions to make this year. Indeed, growth stocks aren’t going straight up, as they have the past couple years. Rather, this sector is one that’s been hit hard by a number of macro factors.

These macro factors have certainly been at play with growth stocks like Shopify (TSX:SHOP)(NYSE:SHOP). Rising interest rates and the impact of inflation are being felt by e-commerce companies and growth stocks in general.

However, today’s decline of more than 16% at the time of writing appears to be tied to Shopify’s announced layoff of 10% of its workforce. Given this material reduction, many are expecting lower growth on the horizon.

Here’s why I think picking up shares of Shopify under $40 makes sense.

This growth stock still has key catalysts to focus on

Shopify’s business model, which caters to small- and medium-sized businesses in the e-commerce space, got a big boost from the pandemic. As more businesses shifted to online sales, Shopify’s revenue and earnings surged as well.

However, with the reopening thesis hurting Shopify, many have moved on to other more “stable” areas of the market. That’s not to say that the transition to e-commerce is over — just that it’s slowed.

That said, those taking the long-term view that e-commerce will eventually win out may want to pay attention to some recent partnerships Shopify has made.

Most recently, Shopify announced a partnership with YouTube to allow merchants to sell goods and services via the video platform. The aim of this partnership is to tap into the growing number of content creators who influence consumer purchasing patterns.

I think this is a key growth driver many investors may want to pay attention to. On-demand video and other integrations in the marketing space should bode well for Shopify over time.

Additionally, Shopify’s been busy integrating its platform with other tech behemoths to offer new services. Apple’s iPhone tap-to-pay feature and integrations with Twitter are two examples. The more Shopify’s ecosystem grows, the better off investors are, at least from a long-term perspective.

Bottom line on this TFSA winner

Given the aforementioned catalysts, as well as Shopify’s historical performance (still up well more than 1,000% from its IPO), this growth stock is one long-term investors have done well with. Those taking a multi-year or multi-decade view of this space may want to look at this impressive selloff as a compelling buying opportunity.

That’s not to say the selling pressure is over. We may be headed lower from here. But at some point, growth stocks like Shopify become very attractive for a TFSA. I think that’s where we’re at right now.

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 Chris MacDonald has positions in Apple. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Apple and Twitter.

More on Tech Stocks

clock time
Tech Stocks

Long-Term Investing: 3 Top Canadian Stocks You Can Buy for Under $20 a Share

These three under-$20 stocks offer excellent buying opportunities for long-term investors.

Read more »

Businessman holding AI cloud
Tech Stocks

AI Will Transform Everything: Investors, Be Early Adopters and Buy These 3 Stocks

Investors looking to invest in companies doing big things in AI should consider these three stocks for their portfolios.

Read more »

stock research, analyze data
Tech Stocks

Forget Shopify: These Unstoppable Stocks Are Better Buys Today 

Should you consider buying Shopify stock while rivals consider a buyout or should you go for stocks with a stronger…

Read more »

A colourful firework display
Tech Stocks

2 Potentially Explosive Stocks to Buy in March

These two growth stocks are destined for many more years of market-crushing returns.

Read more »

edit CRA taxes
Tech Stocks

TFSA Millionaires Are Learning They Can Still Be Taxed

If you day trade stocks like Shopify (TSX:SHOP) in a TFSA, you may be taxed.

Read more »

Shopping and e-commerce
Tech Stocks

Where Will Lightspeed Stock Be in 5 Years?

Lightspeed stock (TSX:LSPD) continues to be touch and go, so what might happen in the next five years?

Read more »

Technology
Tech Stocks

Here’s Why Constellation Software Is a No-Brainer Tech Stock

Are you looking for tech stocks to add to your portfolio? Constellation Software is a no-brainer!

Read more »

Businessman holding AI cloud
Tech Stocks

2 AI Stocks That Wall Street Likes Better Than Nvidia

NVIDIA (NASDAQ:NVDA) may be trendy but Shopify (TSX:SHOP) has more upside according to Wall Street.

Read more »