If there’s a Canadian tech stock worthy of the company of a group like the Magnificent Seven, it has to be Shopify (TSX:SHOP), the Canadian e-commerce darling with plenty of skin in the generative AI (artificial intelligence) game. Undoubtedly, the Trump tariff war has caused the entire tech scene, including the likes of Shopify, to sell off viciously in March and April.
And while SHOP stock shed around 40% of its value from its 52-week peak to its year-to-date trough, I still think younger growth-minded investors shouldn’t ditch the name while it’s in a bit of a funk. Sure, an economic recession could take a bit of strength out of Shopify’s tailwinds. That said, for those willing to stay the course for the next 10 years, I think the Canadian e-commerce darling is a fantastic deal, with its shares going for around $135 per share, down close to 36% from all-time highs.
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Analysts have been downgrading the name, but the tariff turmoil won’t last forever
Of course, you’ll have to brace the tariff turmoil head-on if you’re going to be a net buyer of this dip. Recently, a big-name analyst slashed their price target on Shopify, citing tariffs and its potential to weigh on consumer spending.
Indeed, this is the most obvious headwind that’s pushed Shopify well off its 52-week high. And while it’s really difficult to tell just how much of the looming tariff impact is already priced in (I think most of the impact), I’d be willing to give Shopify the benefit of the doubt as it continues to do everything in its control to stay on the cutting edge of AI innovation.
Gil Luria, an analyst at D.A. Davidson, stated that the Canadian e-commerce firm isn’t “immune” to a consumer slowdown caused by tariffs. Indeed, there’s no avoiding the economic rough patches ahead. But for a firm that has yet to grab all the low-hanging fruit yielded by AI, I wouldn’t hit the panic button on SHOP stock after so many others have already had a chance to throw in the towel.
Whether we’re talking about agentic AI to help individual merchants get more sales or developers leveraging AI tools to be more efficient with future platform updates, Shopify may be one of Canada’s fastest-growing generational large-cap tech stocks. And that makes the name deserving of the “Magnificent” title.
Shopify’s CEO is serious about AI’s potential.
In a prior piece, I remarked on some profound comments from CEO Tobias Lutke, which suggested he sees the true transformative potential of emerging AI technologies (agents included). He stated that no new hires will be brought aboard unless there’s proof that AI cannot do the job. Such remarks, I believe, suggest Lutke is thinking about the next 10 years, not just the next 10 weeks.
Though the firm won’t replace its workers with AI agents overnight, it certainly is not ignoring AI’s potential. The firms that harness the power of technology will gain a huge edge over rivals, while those that shy away from the tech stand to fall behind. Shopify has shown it’s taking steps towards becoming more of an “AI-first” kind of company, so to speak.
In any case, I’d look for Shopify to be a huge margin gainer in the coming 10 years, as it offers more AI across its platform while empowering existing employees to be more productive. While tariff developments could sink the stock further, I’d look to average down today and on any further weakness. At the end of the day, Shopify is one of Canada’s greatest long-term growth stories, and tariffs represent just another hurdle to be leapt over.
