Here’s My #1 Canadian Growth Stock for February 2023

This Canadian growth stock is likely to soar in the next few weeks, but what comes after that is anyone’s guess.

| More on:
Money growing in soil , Business success concept.

Image source: Getty Images

There have been quite a few Canadian stocks on the move these days. After spiraling downwards, it looks like the TSX today may have reached its bottom back in October 2022 — or so we think.

So, if you’re looking to create extra returns in February 2023, I wouldn’t blame you. The thing is, there are a few things to keep in mind before looking for a boost. Let’s consider those before you dive into my pick for a Canadian growth stock this month.

Consider long-term growth

I’ve written over and over in the past about how long-term growth always outweighs short-term gains. It’s true. Again and again, you can find a solid stock on the TSX stock that’s been around for decades and hold it for decades more. Put that same investment in a Canadian growth stock and hold it for the same amount of time, and you’re still likely to see your solid stock do better.

That’s because short-term growth is usually due to the winds of the time. While it may prove to be a great Canadian growth stock in the short term, in the long term, there are bound to be corrections, and then it may even peter out. That’s because not every stock is bound for greatness. And even fewer to become household names.

Before you go for this Canadian growth stock, consider its long-term trajectory.

Consider what’s happening

Investors should also consider what’s going on in the markets and with the company itself before picking up this Canadian growth stock. In the case of this stock, earnings are due next week. What’s more, this report could prove to be a strong one.

While it’s true that shares are likely to keep climbing towards earnings, they could just as easily fall backwards, as investors look to take out their gains. So, I would consider that as well.

But also consider the market as a whole and where it’s headed in the next year. Let’s get into that and this Canadian growth stock right now.

My top pick for February 2023

My top choice for this next month has to be Canadian growth stock Shopify (TSX:SHOP). Shopify stock has absolutely soared during the past few months, up 55% in the last three months alone yet still down 41% in the last year.

So, where is it headed? Earnings are due on Feb. 15, and it could be a doozy for the company. After making plenty of cuts, including to its employees, the company then saw a strong Black Friday to Cyber Monday weekend coupled with the holiday season to bring in stellar revenue growth. So, investors should be watching for that when earnings coming out.

Yet this is all short term. What investors should really pay attention to after that are long-term growth trends. Shopify stock has a strong long-term path to growth. It continues to grow merchant volume and products, with major institutions and even governments using the company.

However, this could eventually come to a head during a recession. Shopify stock has yet to go through one, and all this growth could easily be erased, as we saw in the recent past.

Bottom line

I still believe that Shopify stock will be the top Canadian growth stock on the TSX today for this month. But the long term is anyone’s guess at this point. The company still has a lot of convincing to do on that front, and it could be years before it evens out entirely.

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 Amy Legate-Wolfe has positions in Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

More on Tech Stocks

Tech Stocks

1 Under-the-Radar Beneficiary From the Rise of ChatGPT

ChatGPT will benefit AI-enabled stocks like Docebo (TSX:DCBO).

Read more »

Businessman holding AI cloud
Tech Stocks

TFSA: 2 AI Growth Stocks for Your $6,500 Contribution

Here are two of the best AI stocks to buy in Canada in 2023.

Read more »

edit Colleagues chat over ketchup chips
Tech Stocks

The Best Stocks to Invest $50,000 in Right Now

You can create a portfolio of undervalued stocks with $50,000 right now. Here are three such stocks you can add…

Read more »

Tech Stocks

The Safest Semiconductor Chip Stocks to Own in March 2023

Canadians can invest in two safe semiconductor chip stocks, as the country prepares to expand its industry presence and become…

Read more »

Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks
Tech Stocks

Market Tremors: Buy These ETFs While Everyone Else Is Selling

The US bank crisis has triggered a sell-off raising the risk of a stock market crash. It’s time to buy…

Read more »

Two colleagues working on new global financial strategy plan using tablet and laptop.
Tech Stocks

Treasure Hunting South of the Border: The 2 U.S. Stocks I’d Buy Today

Expand the horizon of your TFSA portfolio south of the border. Here are two stocks that have the potential for…

Read more »

Woman has an idea
Tech Stocks

The 3 TSX Stocks That Can Bring Home the Bacon Over the Next 10 Years

Given the favourable market conditions and their growth initiatives, I expect these three TSX stocks to deliver multi-fold returns over…

Read more »

A worker uses the cloud for paperless work. tech
Tech Stocks

3 Tech Stocks With More Potential Than Any Cryptocurrency

Three tech stocks are safer investment options and have more potential than Bitcoin and other cryptocurrencies.

Read more »