Better Buy: Shopify Stock or Apple Shares?

Shopify and Apple are wonderful tech titans that Canadian investors should have exposure to.

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Shopify (TSX:SHOP) and Apple (NASDAQ:AAPL) are some of the best-known tech stocks to Canadian investors. Undoubtedly, shares of both firms have proven their worth so far this year, with shares of both companies off to the races year to date (YTD). At writing, shares of SHOP and AAPL are up 69% and 51% YTD, respectively. That’s respectable. And though the easy gains have been made, investors may have a reason for optimism as each firm looks to flex its muscles in an environment where it’s hard to do so.

Indeed, high rates have acted a bit like gravity on the tech firms. With a massive cash pile, Apple stock is a mega-cap titan that’s been better able to shrug off the force of higher rates. Meanwhile, Shopify has had to go through layoffs. It overhired during the pandemic-era boom. And now, the firm has been trimming the workforce without cutting too heavily into the core business.

Though Apple didn’t engage in mass layoffs like its big-tech rivals, I do think it’s a mistake to think that the behemoth is not making moves to improve efficiencies. It’s a profitability king. The iPhone maker is just not inclined to follow the herd in the big-cap tech scene!

Apple stock: A mega-cap staple for any Canadian portfolio

Undoubtedly, many Canadian investors may already have exposure to Apple stock, either through direct ownership of shares or via an S&P 500 index fund. Some of the more venturous investors may have stakes in the Nasdaq 100 index ETFs (Exchange Traded Funds), which provide even more exposure to Apple shares.

Undoubtedly, AAPL’s rally has made it an even larger contributor to the cap-weighted indices it’s found in. Apple is a nearly a $3 trillion company. That’s a big deal. Though the company has proven that its size is not weighing down its growth.

As Apple continues to innovate while making prudent investments, I think Apple can keep growth alive and continue breaking new market cap milestones. Indeed, the next stop could be $4 trillion, and then $5 trillion. There’s no set finish line. And in that regard, I do view Apple as the company that can keep raising the market cap ceiling, as others look to catch up.

Shopify stock: Canada’s e-commerce darling

Shopify stock is another massive winner this year. Unlike Apple, which recently touched a nice all-time high, SHOP stock remains down around 62% from its all-time high back in late 2021. Analysts and investors may have gotten a bit too excited when lockdowns struck, and e-commerce felt massive tailwinds.

Now that things are normalized, with a potential recession, it seems like the perfect 2020-21 tailwind has turned into the perfect headwind. Shopify boomed, then it busted. As shares heal, I do think there’s value in betting on the company’s comeback. It’s stepping away from logistics and is looking to new frontiers in the wild world of commerce.

In any case, e-commerce is here to stay, and Shopify is likely to play a huge role in the numerous digital storefronts of the future. With newfound momentum behind it and hopes for a shallow recession, Shopify stock may very well have a pathway to $100 per share.

Better buy: Apple or Shopify stock?

Both names have had a good run. If I had to choose one, I’d go with Apple stock. Why? Apple Vision Pro is a VR/AR headset that could be the breakthrough we’ve been waiting for. If it is, there’s no telling what the next stop will be for the tech giant.

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

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