Those red-hot shares of Shopify (TSX:SHOP) are still worth buying, even after gaining close to 38% to $202 and change per share in the past three months. The company is starting to put together quarters that are much better than Bay and Wall Street expected, and I believe the “uplifting” effects of its artificial intelligence (AI) efforts may just be getting started. Of course, the headline is that a vast majority of AI projects have yet to show any signs of paying off.
However, when it comes to Shopify, I do view it as one of the few firms that could start to really feel the AI-driven growth momentum at its back over the next couple of years. Arguably, the AI tailwind is already coming into effect. Either way, with such a powerful tailwind at its back, I wouldn’t dare bet against the name, even at today’s seemingly suspect valuations, with considerable resistance just north of the $210 per-share level (that’s pretty much the level that needs to be breached for a breakout moment).
Shopify is great, but it’s not the cheapest or technically soundest stock in the world
While I’m not against buying SHOP stock at under $210–215, I’d much rather be a buyer after the psychological resistance level is broken. Indeed, the stock isn’t all too cheap at today’s levels, going for just shy of 82 times trailing price-to-earnings (P/E). As such, I’d much rather get a bit of technical strength as well, even if it means paying 5% or so more for my ticket into Canada’s largest tech titan.
As much as I like the business and its AI momentum, I can’t say I’m in a rush to buy, especially given the potential for a drawdown if the ceiling of resistance can’t be passed. In the near term, there aren’t all too many catalysts to get excited about. Either way, I think there are other growth names that look more exciting at this juncture, especially as the TSX Index looks to keep outpacing the red-hot S&P 500 into the fourth and final quarter of 2025.
Constellation Software: A high-growth name that’s dragging
In short, I’m mildly bullish on Shopify this September. But when it comes to Constellation Software (TSX:CSU), I’d be closer to pounding the table, especially since shares are down close to 16% from their all-time highs. Indeed, the $92 billion software firm has sat out the outstanding bull run so far, and while a big acquisition is overdue, I wouldn’t start getting impatient with the name, especially since I believe management deserves credit for showing a bit of restraint at a time when valuations, especially in the tech scene, might be just a bit on the hot side. Either way, Constellation’s managers deserve the benefit of the doubt as they focus their efforts on investing in the growth engines the firm already has.
At the end of the day, Constellation is a proven long-term winner, and anytime it trails the market, it has proven to be a solid buying opportunity. Sure, CSU stock may not have too many upside catalysts on the horizon, but for those looking for more of a “growth at a reasonable price” kind of name, I’d definitely not shy away from shares at more than $4,300. My only gripe with the stock is that it’s too pricey for a single share. I think it’s time for a big split, perhaps a 40-to-1 one!
