The latest correction in the S&P 500 could be an opportunity to put some new money to work. Though the loonie has been in rally mode over the past couple of sessions, it may be too early in the game to load up on the fast-falling Magnificent Seven names as they turn into falling knives. On this side of the border, there may be better options for long-term investors seeking a good mix of value and growth.
In this piece, we’ll check out two Canadian tech darlings that I think could prove great buys on weakness. Though the TSX Index may be holding up better than the S&P 500 and Nasdaq 100, many individual names are already well into correction territory. While it’s tough to time a bottom or brave an immense amount of negative momentum, I think that if you’ve got $8,000 or more that’s sitting around, it’s a good idea to start forming a list and picking up a few shares after those nasty days.
Of course, the stock market is fresh off a historic bounce off its April lows. As to whether it holds up is anybody’s guess. Regardless, take advantage of the volatility by scooping up oversold names on those days when it seems like there’s no hope and a growing chance of a global economic depression. At the end of the day, buying into weakness is a good move, especially as others fear a worst-case scenario. Despite the trade war and tariffs climbing well over the 100% level between the U.S. and China, the following names, I believe, are still well-equipped to keep innovating their way to better results.
Shopify
After yet another volatile week of trading, Shopify (TSX:SHOP) stock is going for $116 and change. While 52.7 times trailing price to earnings (P/E) still seems a tad on the expensive side, I think the company’s longer-term artificial intelligence (AI) catalysts have yet to be priced in. Indeed, the company has made smart moves to beef up its AI capabilities. And as valuations across the board come in, look for the company to keep wheeling and dealing.
Additionally, there’s room to run in the payments scene, with Shopify moving ahead with its global expansion of Shop Pay. With a front-row seat to payments, and a renewed focus on AI, I’d not hesitate to buy the current dip, even though tariff uncertainty could persist for quarters to come. Shopify chief executive officer Tobias Lutke put it plainly: no more new hires unless the job cannot be done by AI. This statement shows how serious the firm is about seizing the AI opportunity.
Constellation Software
Constellation Software (TSX:CSU) is another pricey-looking stock that’s become a whole lot cheaper in recent weeks. After slipping close to 9% from its highs, CSU shares go for a modest discount. Perhaps most remarkable is how resilient it’s been in the face of a tech- and tariff-fuelled selling spree.
Either way, Constellation is all about the long game. And as tech names slump, look for Constellation to keep doing what it does best, acquiring smaller firms that show tremendous growth promise. Most investors can probably only afford one share ($4,549 and change per share) at this juncture. And as shares fluctuate alongside everything else on tariffs, I’d say it’s time to think about picking up that one share before the $5,000 level is put to the test again. If you have enough for one share, don’t wait for a split!
Between CSU and SHOP, I’d be inclined to put around $4,500 into CSU (one share) and the rest into SHOP on this dip.
