Shopify Stock: My Top Tech Stock to Buy During a Recession

Shopify (TSX:SHOP) stock is a great tech stock to buy and hold for the long haul, even with recession headwinds coming in fast!

| More on:
A shopper makes purchases from an online store.

Image source: Getty Images

With the market rally running out of steam once again, and a recession likely up ahead, there’s a feeling of unease. Making things worse, the recent banking troubles south of the border have really made for a choppy environment.

Though the bank runs and failures may not yet be over with, I think things aren’t as bad as they seem. Looking ahead, the U.S. Federal Reserve may finally have a reason to pause or pivot. Of course, they’ll be data driven, as they always are. However, it’s worth noting that banking woes and relatively resilient corporate earnings could help keep markets holding steady.

Indeed, one should never rule out the possibility of a market correction. That said, don’t expect the next recession to accompany a sharp selloff that brings us back to the lows seen in October of 2022. Some recession-induced damage is already factored in here. We have been hit with a year-long bear market in the United States, after all.

In this piece, we’ll give one top tech stock a second look for beginner investors looking to get a good value for money after the past year of rate and recession fears.

Consider Shopify (TSX:SHOP): one of my favourite Canadian tech titans to hang onto for decades at a time.

A tech titan for the long haul: Shopify

It’s been a painful plunge for Shopify stock, with shares crashing more than 82% from peak to trough between 2021 and 2022. Shares have stabilized and have begun trending higher in recent quarters.

Still, the stock has plunged into a bear market on multiple occasions over the past year. When looking at the longer-term chart, these dips are less noticeable. However, investors must be prepared to dodge and weave past punches thrown by a fiercely volatile market.

Looking ahead, I expect SHOP stock will continue to be a choppier mover than the S&P 500 or TSX Index. Volatility isn’t always a bad thing, though. Remember, volatility means steep moves in both directions. As Shopify looks to stage its recovery from an epic crash, I think it can support its current rally with compelling innovations.

Shopify stock gets a vote of confidence

Recently, an analyst named Andrew Boone of JMP Securities stated that Shopify is an e-commerce leader that’s “gaining traction with larger enterprise businesses.” Indeed, Shopify’s focus has been on smaller merchants, but it’s steadily expanding its reach to larger firms. Such an expansion could be a big deal, as the firm looks to accelerate growth again.

I think Mr. Boone is right on the money. Big business is a big deal, and it could help Shopify keep trending higher, albeit in a choppy fashion. If you’ve got a stomach for wild swings, I’d not hesitate to average into the name here and on any other steep pullbacks over time. For long-term thinkers, the volatility in the name is a good thing.

The Foolish bottom line on Shopify stock

Shopify and the broader tech basket are bound to take more hits as the recession rolls around. That said, the long-term trajectory still looks fully intact. And once the Fed has a chance to hint at a pivot, Shopify stock may already be flirting with $70 per share.

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 has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

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 »