The Canadian dollar is pretty weak right now, hovering just shy of US$0.70. With the recent resignation of Prime Minister Justin Trudeau giving the loonie a bit of a jolt, questions linger as to where it’ll head next. Indeed, there’s a lot of political uncertainty right now as Canada looks to face the threat of Trump tariffs, which may very well be as high as 25%.
It’s an uncertain time for Canada’s economy as tariff threats and political unknowns cloud the near-term future. Either way, don’t expect the loonie to rebound overnight, especially given the profound strength of the greenback, which could become even stronger under the Trump administration.
Would it be a better move to put every Canadian dollar to work domestically on TSX stocks? Possibly, especially if you’re looking to pursue steeper discounts and relative stability should the tech sector (the likeliest source of volatility for this new year) start swinging wildly again. But what if tech keeps running, driven by the artificial intelligence (AI) boom?
Indeed, AI shows plenty of promise going into this new year, with new AI chips and applications that will be coming online. The effort is not cheap, but they could turn into big enough moneymakers to justify buying U.S. stocks despite the weak state of the loonie. If anything, weakness in the Canadian dollar could beget even more weakness. Indeed, a US$0.65 loonie may not be all too far off if worse comes to worst and tariffs are imposed on goods coming from Canada into the U.S.
Without further ado, here are two U.S. stocks that I still think are great bets despite the weak loonie and relative froth in the S&P 500.
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Apple
Apple (NASDAQ: AAPL) is still the largest company out there, with a $3.66 trillion market cap. And while its run to a $4-5 trillion valuation may be postponed as the stock plunges into the new year, down nearly 3% for 2025 thus far and 6.5% from recent all-time highs, I still think it’s never a good idea to bet against the Cupertino-based giant as it continues delivering all the wonderful gadgets, software, and services to make lives of fans easier.
Recently, AAPL stock caught a downgrade from MoffettNathanson, sending shares falling to $242 and changing. Indeed, China’s headwinds and other uncertainties have made Apple stock an easy name to ditch to start the new year right.
Why settle for Apple as it grapples with pressure from China while iPhone sales continue to disappoint?
Indeed, Apple Intelligence is a giant unknown right now. Is it a real growth driver? Or will it continue failing to move the needle in iPhone sales? So far, the consumer has spoken with their wallets, and Apple’s AI is not a must-have feature — not yet. And while the iPhone 17 hardware combined with a more intelligent iOS 19 could drive upgrades, investors getting in the name here should be willing to ride things out through what could be a rough couple of quarters.
It’s easy to be bearish on Apple in 2025. But will betting against shares be a good move?
I don’t think so. The 39.8 times trailing price-to-earnings (P/E) ratio seems high, but Apple can quickly pivot and win back the bulls. Those who sold may struggle to get back in once AAPL stock gets going again. If you’re a Canadian investor, perhaps taking advantage of the latest pullback could prove profitable for 2025.
